USD/JPY is expected to trade with bullish bias above 113.55. Although the pair retreated from 114.15 (Mar 7 top), a support base at 113.55 has formed and has allowed for a temporary stabilization. The relative strength index lacks downward momentum. Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Therefore, as long as 113.55 is not broken, expect a rebound to 114.35. A break above this level would call for a new rise to 114.60.
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 114.35 and the second one at 114.60. In the alternative scenario, short positions are recommended with the first target at 113.30, if the price moves below its pivot points. A break of this target may push the pair further downwards, and one may expect the second target at 113.00. The pivot point is at 113.55.
Resistance levels: 114.35, 114.60, and 115.00
Support levels: 113.30, 112.75, and 112.25
The material has been provided by InstaForex Company - www.instaforex.com