USD/JPY is expected to trade with a bearish bias as key resistance is at 100.65. Despite the recent technical rebounds, the pair remains under pressure below its key resistance at 100.65. The relative strength index lacks strong upward momentum, calling for caution. On the economic front, the U.S. Commerce Department reported that new home sales jumped 12.4% on month to a seasonally adjusted annual rate of 654,000 units in July (vs. -2.0% on month to 580,000 units expected).
As long as 100.65 holds on the upside, the pair is likely to pull back to challenge its nearest support at 100.00. A break below this level would open the way to further weaknesses toward 99.70.
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 100.60 and the second one, at 100.90. In the alternative scenario, short positions are recommended with the first target at 99.90 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 99.70. The pivot point is at 100.10.
Resistance levels: 100.60, 100.90, 101.20
Support levels: 99.90, 99.70, 98.95
The material has been provided by InstaForex Company – www.instaforex.com