Overview:
USD/JPY is expected to consolidate with bullish bias after hitting two-month high at 103.93 on Wednesday.It is underpinned by the positive dollar sentiment (ICE spot dollar index last 80.21 versus 80.06 early Wednesday) as encouraging U.S. March ADP national employment report on private-sector jobs (increased by 191,000 versus +200,000 expected); bolstered expectations of upbeat U.S. nonfarm jobs data due Friday; while U.S. February factory orders rose stronger-than-expected 1.6% (versus +1.2% forecast). USD/JPY is also supported by the demand from Japan importers and investment trusts, positive risk appetite (VIX fear gauge eased 0.08% to 13.09, S&P hit record high 1,893.17 before closing up 0.29% at 1,890.9 overnight) on sanguine U.S. data and recent dovish comments from Fed's Chairwoman Yellen. But USD/JPY gains are tempered by the Japan exports and profit-taking on short-yen positions as investors trim risk exposure before Friday's U.S. nonfarm jobs report.
Technical сomment:
Daily chart is positive-biased as MACD and stochastics are bullish, although latter is at overbought zone, five-day moving average is above 15-day MA and is advancing.
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 104.10 and the second target at 104.45. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.95. A breach of this target will push the pair further downwards and one may expect the second target at 102.65. The pivot point is at 103.40.
Resistance levels:
104.10
104.45
104.80
Support levels:
102.95
102.65
102.40
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