USD/JPY is under pressure. The pair is holding on the downside and is trading below the declining 20-period and 50-period moving averages, which play resistance roles and maintain the downside bias. The relative strength index is below its neutrality level at 50. In addition, the upside potential should be limited by the key resistance at 110.10.
Therefore, as long as this key level holds on the upside, look for a further downside to 109.30 and even to 109.05 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 109.30. A break below this target will move the pair further downwards to 109.05. The pivot point stands at 110.10. 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 110.10 and the second one at 111.00.
Resistance levels: 110.50, 111.00, and 111.45
Support levels: 109.30, 109.05, and 108.35
The material has been provided by InstaForex Company - www.instaforex.com