USD/JPY is expected to follow an upside movement. The pair is supported by a rising trend line since August 23, and is currently challenging the next resistance at 100.62, representing a key horizontal level. The upward momentum is further reinforced by its rising 50-period moving average, which acts as a support role and maintains the bullish bias. Besides, the relative strength index is above its neutrality area at 50. On the economic data front, initial jobless claims lowered slightly to 261k in the week ended Aug. 20th (estimated 265k) from 262k in the previous week. Continuing claims decreased to 2.15M in week ended Aug. 13th (forecasted 2.16M) compared with 2.18M in prior week. Separately, durable goods orders jumped by 4.4% in July in a preliminary estimate (estimated 3.4%) from a fall of 4.2% in June (revised from -3.9%). The U.S. dollar was almost flat as traders awaited Yellen’s speech at the annual Jackson Hole symposium. As long as 100.25 holds on the downside, look for further advance to 100.62 and even to 100.90 in extension.
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 100.10 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 99.90. The pivot point is at 100.25.
Resistance levels: 100.60, 100.90, 101.20
Support levels: 100.10, 99.90, 99.70
The material has been provided by InstaForex Company – www.instaforex.com