Overview:
USD/JPY is expected to consolidate with bearish bias after hitting a five-week low at 101.31 this morning. It is undermined by tg=he negative dollar sentiment (ICE spot dollar index last 80.04 versus 80.21 early Friday) as last week's disappointing U.S. Q1 GDP and consumer spending data continue to weigh on the dollar. USD/JPY is also weighed by the Japan exporter sales. But USD/JPY losses are tempered by the demand from Japan importers and positive investor risk appetite (VIX fear gauge eased 3.18% to 11.26) as U.S. stocks rose Friday (S&P 500 gained 0.19%) on higher-than-expected final University of Michigan June consumer sentiment index (came in at 82.5 versus 81.9 forecast). But risk sentiment is dented by the warning from the Bank for International Settlements in its annual report that "euphoric" financial market doesn't reflect shaky global economic and geopolitical outlook.
Technical comment:
Daily chart is negative-biased as MACD and stochastics are bearish, although the latter is at oversold zone, 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 101.15. A breach of this target will move the pair further downwards to 101. The pivot point stands at 101.60. 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:
101.15
101
100.85
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