Overview:
USD/JPY is expected to consolidate with bearish bias after hitting three-week low at 101.55 on Tuesday. It is undermined by the positive yen sentiment after the Bank of Japan held steady on its policy Tuesday and BOJ Gov. Kuroda said he wasn't contemplating any additional easing steps because he is "as convinced as before" that the BOJ can defeat 15 years of deflation and spur 2% inflation by next spring. The yen sentiment is also boosted after Japan recorded a current account surplus of Y612.7 billion in February - its first surplus in five months. USD/JPY is also weighed by lower the U.S. Treasury yields amid investors' belief the Federal Reserve will be in no rush to raise interest rates, broadly weaker dollar undertone (ICE spot dollar index last 79.79 versus 80.22 early Tuesday); and the Japanese exports sales. But USD/JPY losses are tempered by the demand from Japan's importers, yen-funded carry trades amid improved investor risk appetite (VIX fear gauge eased 4.37% to 14.89) as U.S. stocks regained strength overnight (S&P rose 0.38%) and U.S. NFIB Index of Small Business Optimism rose to 93.4 in March from 91.4 in February.
Technical сomment:
Daily chart is negative-biased as stochastics is falling from overbought zone, MACD is staging 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 101.45. A breach of this target will move the pair further downwards to 101.20. The pivot point stands at 102.30. In case the price moves in the opposite direction and bounces back from support level, and then it 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 102.65 and the second target at 103.
Resistance levels:
102.65
103
103.45
Support levels:
101.45
101.20
101
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