USD/JPY is expected to trade with a bullish bias above 101.10. The pair posted some consolidations, but still stands above its horizontal support at 101.10. Meanwhile, the rising 50-period moving average is playing a support role, and maintains the upside bias. Even though a continuation of the consolidation cannot be ruled out, its extent should be limited. On Friday, U.S. stock indexes rebounded almost 1%. Energy shares advanced on oil prices' pushing above $48 a barrel, and financial shares swung to the upside after an AFP report said that Deutsche Bank was close to a reduced $5.4 billion settlement with U.S. authorities over its sale of mortgage-backed securities.
The Dow Jones Industrial Average rose 164 points (+0.9%) to 18308 posting the sixth straight session of triple-digit move. The S&P 500 increased 17 points (+0.8%) to 2168, and the Nasdaq Composite was up 42 points (+0.8%) to 5312.
To conclude, as long as 101.10 holds on the downside, we expect a new rise to 101.85 at first. A break above this level would open the path to further advance toward 102.10.
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 101.85 and the second one at 102.10. In the alternative scenario, short positions are recommended with the first target at 100.70 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 100.45. The pivot point lies at 101.10.
Resistance levels: 101.85, 102.10, 102.45
Support levels: 100.70, 100.45, 99.60
The material has been provided by InstaForex Company - www.instaforex.com