USD/JPY is expected to continue to trade with bullish bias. The pair stands firmly above its horizontal support at 100.45, and is holding on the upside. Meanwhile, the 20-period and 50-period moving averages are heading upward, and maintain the bullish bias. Besides, the relative strength index stays above its neutrality area at 50, and lacks downward momentum. On Thursday, the US stock indexes dropped about 1% as the broader financial sector was weighed by reports that hedge funds had withdrawn some excess cash and positions held at Deutsche Bank raised concerns of counterparty risk. Healthcare and utilities shares were also heavy. The Dow Jones Industrial Average fell 195 points (-1.1%) to 18,143, the S&P 500 declined 20 points (-0.9%) to 2,151, and the Nasdaq Composite was down 49 points (-0.9%) to 5,269.
Therefore, as long as 100.45 is not broken, look for a new rise to 101.45 at first. A break above this level would open the path to further advance toward 102.05.
Trading Recommendation: The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 101.50 and the second one at 102.05. In the alternative scenario, short positions are recommended with the first target at 100.20 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 99.90. The pivot point lies at 100.45.
Resistance levels: 101.50, 102.05, 102.35
Support levels: 100.20, 99.60, 99.15
The material has been provided by InstaForex Company - www.instaforex.com