USD/JPY is expected to trade with a bullish bias above 112.15. The pair recently broke above its declining trend line since Nov 25, and now is standing firmly above 112.15. The horizontal support base at 112.15 has been formed and has allowed for a temporary stabilization. Besides, the pair is expected to challenge its 20-period moving average in sight.
The U.S. Commerce Department revised the 3Q GDP growth to +3.2% on quarter annualized (vs. +3.0% expected) from +2.9% previously estimated. Personal consumption growth was upgraded to +2.8% (vs. +2.3% expected) from +2.1%. U.S. government bonds managed to reverse earlier price declines driven by the strong GDP data, pressing the benchmark 10-year U.S. Treasury yield down to 2.304% from 2.319% on Monday.
Hence, as long as 112.15 holds as the key support, the pair is expected to rise toward 112.80 at first and 113.25 in extension.
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 113.25 and the second one at 113.90. In the alternative scenario, short positions are recommended with the first target at 111.60 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 110.20. The pivot point lies at 112.15.
Resistance levels: 113.25, 113.90, 114.25
Support levels: 110.75, 110.25, 110
The material has been provided by InstaForex Company – www.instaforex.com
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