USD/JPY is expected to trade with bullish bias above 117.10. The pair stays above its horizontal support at 117.10, and lacks downward momentum. Even though a continuation of the consolidation at the current stage cannot be ruled out, its extent should be limited.
On Tuesday, U.S. indices closed higher as the Nasdaq and the Dow Jones reached all-time highs. The Dow Jones Industrial Average rose 92 points (+0.5%) to 19,974, the S&P 500 added 8 points (+0.4%) to 2,271 and the Nasdaq Composite was up 27 points (+0.5%) to 5,484.
Shares in the banks, diversified financials and consumer durables & apparel sectors ended on a positive note while shares in the food, beverage & tobacco, energy and health care equipment & services sectors were in the negative territory.
Thus, as long as 117.10 is not broken, a new bounce is expected with 118.00 and 118.20 as the next targets.
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 118.00 and the second one at 118.20. In the alternative scenario, short positions are recommended with the first target at 116.80 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 116.50. The pivot point lies at 117.10.
Resistance levels: 118.00, 118.40, 118.65
Support levels: 116.80, 116.50, 116.15
The material has been provided by InstaForex Company - www.instaforex.com