USD/JPY is Under pressure. The pair is accelerating on the downside, capped by its descending 20-period and 50-period moving averages. Meanwhile, the relative strength index is below 50, and lacks upward momentum.
On Friday, U.S. indices closed mixed despite the stronger-than-expected jobs report. The DJIA dropped 22 points (-0.1%) to 19,170, while the S&P 500 was flat at 2,192 and the Nasdaq Composite rose 5 points (+0.1%) to 5,255.
Shares in the Automobiles & Components, Media and Banks sectors lost momentum while shares in the Semiconductors & Semiconductor Equipment, Real Estate and Utilities sectors ended higher.
On the economic data front, change in nonfarm payrolls grew 178k in November (estimated 180k) from 142k in the previous month (revised from 161k). On the other hand, change in manufacturing payrolls decreased 4k in November (forecasted -2k) compared with a decrease of 5k (revised from -9k). In other news, the unemployment rate came out to 4.6% in November (estimated 4.9%) from 4.9% in the prior month.
Thus, as long as 114.20 (a key horizontal level) holds as the resistance, the risk of a break below 112.55 remains high.
Trading Recommendation:The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 112.55. A break below this target will move the pair further downwards to 112.10. The pivot point stands at 114.20. In case the price moves in the opposite direction and bounces back from the support level, it will go above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 114.80 and the second one at 115.30.
Resistance levels: 114.80, 115.30, 115.85
Support levels: 112.55, 112.10, 111.60
The material has been provided by InstaForex Company – www.instaforex.com
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