USD/JPY is expected to trade with bullish bias above 111.75. Although the pair retreated from 112.30 (the high of May 2), the pair is still trading above the key support at 111.75, which should limit the downside potential. Even though further consolidation cannot be ruled out, its extent is likely to be limited.
To conclude, above 111.75, look for a further rise to 112.30. A break above this level would trigger a new upside to 112.55.
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 112.30 and the second one at 112.55. In the alternative scenario, short positions are recommended with the first target at 111.55 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 111.20. The pivot point lies at 111.75.
Resistance levels: 112.30, 112.55, and 112.85
Support levels: 111.55, 111.20, and 111.00
The material has been provided by InstaForex Company - www.instaforex.com