Fundamental overview:
USD/JPY is expected to trade in a higher range. It is underpinned by the negative yen sentiment as speculation persists that Prime Minister Abe might call for an early election in December and delay a planned sales tax hike. USD/JPY is also supported by the ultra-loose Bank of Japan monetary policy and demand from Japan's importers. But USD/JPY gains are tempered by the lower U.S. Treasury yields (10-year at 2.345% versus 2.359% late Wednesday), softer dollar sentiment (ICE spot dollar index last at 87.77 versus 87.86 early Thursday) after more-than-expected 290,000 U.S. jobless claims in week ended Nov. 8 (versus forecast 281,000), subdued investor risk appetite (VIX fear gauge rose 5.91% to 13.79) as U.S. stocks surrendered gains after hitting record highs overnight (S&P 500 hit all-time high 2,046.18 but closed up just 0.05% at 2,039.33), Japan's export sales and positions adjustment before the weekend.
Technical comment:
Daily chart is positive-biased as MACD is bullish, stochastics stays elevated at overbought levels, 5 and 15-day moving averages are advancing although inside-day-range pattern was completed on Thursday.
Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 116.90 and the second target at 117.30. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 115.35. A break of this target would push the pair further downwards and one may expect the second target at 114.90. The pivot point is at 115.70.
Resistance levels:
116.90
117.30
117.55
Support levels:
115.35
114.90
114.50
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