USD/JPY is expected to prevail its downside movement. The pair remains on the downside, capped by its falling 20-period and 50-period moving averages. The nearest key resistance at 104.20 maintains strong selling pressure on the prices. Furthermore, the process of lower highs and lows remains intact.
On Tuesday, U.S. stocks saw a sell-off amid growing uncertainty over the U.S. presidential election. The Dow Jones Industrial Average dropped 105 points (-0.6%) to 18,037, the S&P 500 fell 14 points (-0.7%) to 2,111 and the Nasdaq Composite was down 35 points (-0.7%) to 5,153. Buying of U.S. government bonds gained traction as political uncertainty lingered. The benchmark U.S. 10-year Treasury note yield sank from a session-high of 1.877% to 1.822% at close, down from 1.834% Monday. The U.S. dollar found itself on the defensive side as traders adjusted their positions amid uncertainty over the U.S. presidential election. Polls showed a tightening race between Donald Trump and Hillary Clinton following Friday’s announcement that the FBI found new evidence in its investigation of Mrs. Clinton’s emails.
Hence, as long as 104.20 is not surpassed, likely decline to 103.20 and 102.80 in extension.
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 103.20. A break below this target will move the pair further downwards to 102.80. The pivot point stands at 104.20. In case the price moves in the opposite direction and bounces back from the support level, it will move 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 104.65 and the second one at 105.15.
Resistance levels: 104.65, 105.15, 105.55
Support levels: 103.20, 102.80, 102.45
The material has been provided by InstaForex Company – www.instaforex.com
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