USD/JPY is expected to trade with bearish bias. The pair remains under pressure below its horizontal resistance at 102.45. Meanwhile, the process of lower highs and lower lows remains intact, which should confirm a negative outlook. Besides, the descending 50-period moving average is playing a resistance role. In addition, the relative strength index advocates for further decline.
On the economic data front, the U.S. Commerce Department reported that retail sales declined 0.3% on month in August (vs. -0.1% expected, +0.1% in July). The Federal Reserve announced that industrial production fell 0.4% on month in August (vs. -0.2% expected, +0.6% in July). Besides, the Labor Department said initial jobless claims added 1,000 to 260,000 for the week ended September 10 (vs. 265,000 expected).
To sum up, as long as 102.45 holds on the upside, the pair is likely to drop to 101.70 at first, and then to 101.45 in extension. Alternatively, only a break above 102.45 would call for a new rise to 102.75 as a first target.
Trading Recommendation: The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 101.70. A break below this target will move the pair further downwards to 101.45. The pivot point stands at 102.45. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 102.75 and the second one at 103.00.
Resistance levels: 102.75, 103.00, 103.35
Support levels: 101.70, 101.45, 100.80
The material has been provided by InstaForex Company - www.instaforex.com