Overview:
USD/JPY is expected to consolidate in a higher range as markets await 1230 GMT U.S. April non-farm payrolls (expected to have increased by 215,000) and unemployment rate (expected to have slipped to 6.6% from 6.7%). No strong cue for yen-funded carry trades from Wall Street as the U.S. stocks finished near the flat line overnight (S&P 500 slipped 0.01%) as caution prevailed before Friday's payrolls report and U.S. data were mixed, larger-than-expected 0.9% on-month increase in U.S. March personal spending (versus +0.6% forecast), 0.5% increase in personal income (versus +0.4% forecast) and stronger-than-expected rise in U.S. ISM manufacturing PMI to 54.9 in April from 53.7 in March (versus 54.3 forecast) were offset by the surprise 14,000 increase in U.S. jobless claims in week ended April 26 to 344,000 (versus forecast for drop to 320,000), weaker-than-expected 0.2% increase in U.S. March construction spending (versus +0.5% forecast) and drop in final Markit U.S. April manufacturing PMI to 55.4 from 55.5 in March. USD/JPY is weighed by the lower U.S. Treasury yields and Japan exporter sales. But USD/JPY downside is limited by the demand from Japan importers and positions adjustment before Japan's long weekend (financial markets in Japan are closed for holiday on Monday and Tuesday).
Technical сomment:
Daily chart is mixed as stochastics is bearish, but MACD is still in bullish mode, while five-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 101.90 and the second target at 101.70. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.75. A breach of this target will push the pair further downwards and one may expect the second target at 102.90. The pivot point is at 102.20.
Resistance levels:
102.75
102.90
103.20
Support levels:
101.90
101.70
101.50
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