Overview:
USD/JPY is expected to trade in higher range. It is underpinned by the positive dollar sentiment (ICE spot dollar index last 80.42 versus 80.37 early Friday) and yen-funded funded carry trades amid positive risk appetite (VIX fear gauge eased 8.13% to seven-year low 10.73, S&P closed up 0.46% at all-time high 1,949.44 Friday; DJIA hit record high 16,924.28) on bigger-than-expected 216,000 increase in U.S. May non-farm payrolls (versus +210,000 forecast) and lower-than-expected May unemployment rate of 6.3% (versus 6.4% forecast), larger-than-expected $26.8 billion increase in U.S. consumer credit in April (versus forecast for $15 billion increase). USD/JPY is also supported by the demand from Japan importers, higher U.S. Treasury yields. But risk sentiment dented by the heightened concerns over domestic demand in China after surprise 1.6% on-year drop in Chinese May imports (versus forecast for 6.0% increase) which pushed the trade surplus to $35.92 billion from $18.45 billion in April (versus forecast of $23.4 billion surplus) as exports rose 7.0% (roughly in line with +7.2% forecast). USD/JPY gains are also tempered by the Japan exporter sales.
Technical comment:
Daily chart is mixed as MACD is bullish, five-day moving average is above 15-day MA and is advancing, but stochastics is bearish at overbought 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 102.80 and the second target at 103.10. In the alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102. A breach of this target will push the pair further downwards and one may expect the second target at 101.80. The pivot point is at 102.15.
Resistance levels:
102.80
103.10
103.45
Support levels:
102
101.80
101.50
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