USD/JPY is expected to trade with bullish bias. The pair remains bullish above its rising 20-period and 50-period moving averages, which play support roles and maintains the upward bias. The relative strength index stands firmly above its neutrality level at 50.
On Friday, US stocks slipped, dragged by losses in consumer durables & apparel and health-care sectors. The Dow Jones Industrial Average declined by 35 points (-0.2%) to 18,867, the S&P 500 eased by 5 points (-0.2%) to 2,181, and the Nasdaq Composite was down by 12 points (-0.2%) to 5,321. The U.S. dollar was buoyed by hawkish comments by St. Louis Federal Reserve President James Bullard who said, “Markets are currently putting a high probability on a December move by the FOMC. I’m leaning towards supporting that.”
The ICE US Dollar Index stretched 0.3% higher to 101.21, the first time it closed above 101.00 since April 8, 2003. The index posted a 4.3% gain for the tenth consecutive session, its biggest since March 2015.
In these perspectives, as long as support holds at 110.30, look for further advance to 111.65 and even to 112.0 as possible.
Trading Recommendation: 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 111.65 and the second one at 112.00. In the alternative scenario, short positions are recommended with the first target at 109.80 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 109.20. The pivot point lies at 110.30.
Resistance levels: 111.65, 112.00, 112.45
Support levels: 109.80, 109.20, 108.65
The material has been provided by InstaForex Company – www.instaforex.com
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