Overview:
USD/JPY is expected to trade with bearish bias. It is undermined by the flows to safe-haven JPY and unwinding of JPY-funded carry trades amid increased risk aversion as concerns mount over Russia's military intervention into Ukraine. USD/JPY is also weighed by the negative dollar sentiment (ICE spot dollar index last 79.84 versus 80.28 early Friday) after sharp downward revision of the U.S. 4Q GDP to a seasonally adjusted annual rate of +2.4% from original estimate of +3.2%, smaller-than-expected 0.1% rise in the U.S. pending home sales index to 95.0 in January (versus +1.4% forecast) and Japanese exports sales. But the U.S. dollar sentiment is soothed by the surprise rise in the U.S. February University of Michigan consumer sentiment index to 81.6 from a preliminary reading of 81.2 (versus forecast for no change at 81.2) and rise in U.S. ISM-Chicago PMI to 59.8 in February from January's 59.6. USD/JPY losses are also tempered by the demand from Japan importers and loose BOJ monetary policy.
Technical сomment:
Daily chart is negative-biased as stochastics is falling from overbought zone , MACD staging is bearish crossover against its exponential moving average.
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. Short position is recommended with the first target at 101. A breach of this target will move the pair further downwards to 100.70. The pivot point stands at 101.70. In case the price moves in the opposite direction, bounces back from support level, and then moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 101.90 and the second target at 102.20.
Resistance levels:
101.90
102.20
102.45
Support levels:
101
100.70
100.55
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