USD/JPY is expected to prevail its upside movement. The pair recorded a succession of higher tops and higher bottoms since September 13, which confirms an intraday bullish view. Meanwhile, both the 20-period and 50-period moving averages are heading upward. A support base at 102.00 has formed and should limit the downside potential.On Tuesday, U.S. stock indexes resumed their decline losing over 1% as sectors across the board weakened. The Dow Jones Industrial Average shed 258 points (-1.4%) to 18066, the S&P 500 fell 32 points (-1.5%) to 2127. Both indexes are now lower than the closing levels of last Friday when stocks plunged over 2%. Meanwhile, Nasdaq Composite was down 56 points (-1.1%) to 5155. The U.S. dollar received bids as investors shifted away from riskier assets amid uncertainty of when the U.S. Federal Reserve will raise interest rates again.
Hence, as long as 102.40 is not broken, expect a new rise to 103.45, if breakout, look for further advance to 103.75 as likely.
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 103.45 and the second one at 103.75. In the alternative scenario, short positions are recommended with the first target at 102.00 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 101.45. The pivot point is at 102.40.
Resistance levels: 103.45, 103.75, 104.25
Support levels: 102.00, 101.45, 100.80
The material has been provided by InstaForex Company - www.instaforex.com