Technical analysis of USD/JPY for April 10, 2015 Market Analysis Review

Fundamental outlook:
USD/JPY is expected to consolidate with bullish bias after hitting a three-week high of 120.74 on Thursday. It is underpinned by the positive dollar sentiment (ICE spot dollar index last 98.99 versus 98.06 early Thursday) as the four-week moving average for the U.S. jobless claims fell by 3,000 to 282,250 in the week ended April 4. It is the lowest level since June 2000. The pair is also supported by a stronger-than-expected on-month increase of 0.3% in the U.S. February wholesale inventories (versus forecast +0.2%). USD/JPY is also boosted by the higher U.S. Treasury yields (10-year at 1.963% versus 1.895% late Wednesday), reduced safe-haven appeal of yen amid positive global risk sentiment (VIX fear gauge eased 6.37% to 13.09, S&P 500 closed up 0.45% at 2,091.18 overnight), demand from Japan's importers and the ultra-loose Bank of Japan's monetary policy. But USD/JPY gains are tempered by the Japanese exports and positions adjustment ahead of the weekend.

Technical comment:
The daily chart is positive-biased as stochastics is bullish, the MACD histogram bars turned positive, five-day moving average is staged bullish crossover against 15-day moving average.

Trading recommendations:

The pair is trading above its pivot point. It is likely to trade in a wider range as far as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 120.80 and the second target at 121.20. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 119.40. A break of this target is likely to push the pair further downwards, and one may expect the second target at 119.15. The pivot point is at 119.85.

Resistance levels:

120.80

121.20

121.65

Support levels:

119.40

119.15

118.75

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