Overview:
USD/JPY is expected to trade in higher range. It is undermined by the negative dollar sentiment (ICE spot dollar index last 79.94 versus 80.13 early Monday) after Fed's Williams said U.S. central bank's policy is "fundamentally" unchanged and there is no suggestion from last week's Fed statement that rate hikes could come sooner than previously expected; drop in Markit U.S. flash manufacturing PMI to 55.5 in March from 57.1 in February; fall in three-month moving average of Federal Reserve Bank of Chicago's National Activity Index to -0.18 last month, the first reading below zero in six months for the average, from January's +0.02. USD/JPY is also weighed by the lower U.S. Treasury yields, Japan's exports sales and lingering concerns over the crisis in Ukraine. But USD/JPY losses are tempered by the demand from the Japanese importers and loose Bank of Japan monetary policy.
Technical сomment:
The daily chart is mixed as stochastics is turning bearish, but MACD is bullish, 15-day moving average is meandering sideways.
Trading recommendation:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 102.65 and the second target at 102.85. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.75. A breach of this target will push the pair further downwards and one may expect the second target at 101.45. The pivot point is at 102.
Resistance levels:
102.65
102.85
103.15
Support levels:
101.75
101.45
101
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