USD/JPY is expected to trade in lower range . The pair broke below its 20-period and 50-period moving averages which play resistance roles and maintain the bearish bias. The relative strength index is bearish and calls for further downside. In addition, the upside potential should be limited by the key resistance at 111.70.
Therefore, as long as this key level is not surpassed, look for further drop to 111.15 and even to 110.95 in extension.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 111.15. A break below this target will move the pair further downwards to 110.95. The pivot point stands at 111.70. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 111.15 and the second one at 112.15.
Resistance levels: 111.95, 112.15
Support levels: 111.50, 110.95, and 110.55
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