USD/JPY is expected to prevail its upside movement. The pair bounced off its 20-period and 50-period moving averages, and is accelerating on the upside. The relative strength index is bullish above its neutrality level at 50, which advocates further upsides.
On Wednesday, U.S. indices closed mixed. The Dow Jones Industrial posted a new all-time high while the Nasdaq 100 consolidated. The Dow Jones Industrial Average gained 59 points (+0.3%) to 19,083, the S&P 500 was flat at 2,205, and the Nasdaq Composite was down 6 points (-0.1%) to 5,381.
Health Care Equipment & Services, Capital Goods and Telecommunication Services sectors outperformed, while Food, Beverage & Tobacco, Utilities and Real Estate sectors underperformed.
The ICE U.S. Dollar Index surged 0.65% to 101.70, a fresh 13-year high after stronger than expected U.S. economic data.
Therefore, as long as the key support at 111.30 is not broken, the pair is likely to challenge its next resistance at 113.75, and 114.30 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 113.75 and the second one at 114.30. In the alternative scenario, short positions are recommended with the first target at 110.75 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 111.30.
Resistance levels: 112.00, 112.45, 113.15
Support levels: 110.20, 109.80, 109.20
The material has been provided by InstaForex Company – www.instaforex.com
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