Overview:
USD/JPY is expected to trade in a lower range. The liquidity was thin in Asia today as financial markets in Japan were shut for holiday. USD/JPY is undermined by the negative dollar sentiment (ICE USD Index last 80.64 versus 80.93 early Friday) on smaller than expected 74,000 increase in U.S. December non-farm payrolls (well below +200,000 forecast), allowing the Federal Reserve to take its time in scaling down its bond-purchase program. The U.S. unemployment rate unexpectedly fell to 6.7% in December (versus forecast for no change at 7%), but that was largely due to people leaving the workforce. USD/JPY is also weighed by lower U.S. Treasury yields. But USD/JPY losses are tempered by the sell-yen orders from Japan importers, and ultra-loose Bank of Japan's monetary policy.
Technical comment:
Daily chart is negative-biased as both MACD and stochastics both turned bearish, five-day moving average is staged bearish crossover against the15-day MA.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. A short position is recommended with the first target at 0.8985 in mind. A breach of this target will move the pair further downwards to 0.897. The pivot point stands at 0.907. In case the price moves in the opposite direction, bounces back from support, and moves above its pivot point, the price is most favorably expected to move further to the upside. In that scenario a long position is recommended with the first target at 0.91 and the second target at 0.9125.
Resistance levels:
104.2
104.7
105
Support levels:
103.1
102.8
102.5
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