Overview:
USD/JPY is expected to trade with bearish bias. It is undermined by the soft dollar sentiment after weaker-than-expected 0.2% rise in U.S. May personal spending (versus forecast +0.4%), drop in Kansas City Fed's manufacturing composite index to 6 in June from 10 in May, and more-than-expected 312,000 U.S. jobless claims during the week ended June 21 (versus 310,000 forecast). USD/JPY is also weighed by the lower U.S. Treasury yields and Japan exporter sales. But USD/JPY losses are tempered by the demand from Japan importers; diminished investor risk appetite (VIX fear gauge rose 0.35% to 11.63, S&P 500 slipped 0.12% overnight) and positions adjustment before the weekend.
Technical comment:
Daily chart is negative-biased as MACD and stochastics are bearish, five-day moving average is below 15-day MA and is declining.
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 101.30. A breach of this target will move the pair further downwards to 101.15. The pivot point stands at 101.65. In case the price moves in the opposite direction and bounces back from the 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 101.80 and the second target at 102.
Resistance levels:
101.80
102
102.15
Support levels:
101.30
101.15
100.85
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