USD/JPY is trading under pressure below the key resistance at 111.75, which should limit the upside potential. The declining 50-period moving average is playing a resistance role. The relative strength index is below its neutrality level at 50.
Hence, as long as 111.75 holds on the upside, look for a further drop to 110.30 and even to 109.90 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 110.30. A break below this target will move the pair further downwards to 109.90. The pivot point stands at 111.75. 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 112.20 and the second one at 112.55.
Resistance levels: 112.20, 112.55, and 112.85
Support levels: 110.30, 109.90, and 109.50
The material has been provided by InstaForex Company - www.instaforex.com