Overview:
USD/JPY is expected to trade in higher range. Spotlight is on 12:30 GMT U.S. April retail sales data (forecast +0.4%). USD/JPY is underpinned by the yen-funded carry trades amid positive investor risk sentiment (VIX fear gauge eased 5.34% to 12.23) as the Dow Jones Industrial Average and S&P 500 advanced to all-time highs overnight (S&P 500 hit record-high 1,897.13 before closing up 0.97% at 1,896.65) on prospect of continued policy accommodation by G3 central banks, while Moscow repeated calls for talks between pro-Russian separatists and Kiev to solve Ukraine's crisis after Sunday's secession referendum. USD/JPY is also supported by the demand from Japan importers and higher U.S. Treasury yields. But USD/JPY gains are tempered by the Japan exporter sales. Yen crosses were vulnerable to 05:30 GMT China April industrial output, retail sales and fixed assets investment data.
Technical сomment:
Daily chart is mixed as MACD is bearish, but stochastics is rising from the oversold zone.
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 102.55 and the second target at 102.70. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.95. A breach of this target will push the pair further downwards and one may expect the second target at 101.85. The pivot point is at 102.05.
Resistance levels:
102.55
102.70
103
Support levels:
101.95
101.85
101.55
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