USD/JPY is expected to trade with bullish bias. The pair recorded a succession of higher tops and higher bottoms since September 12, which confirms a bullish view. Meanwhile, the rising 20-period moving average crossed above the 50-period one and is playing a support role. Additionally, the relative strength index is bullish above its neutrality area at 50 and calls for a rebound.
On Monday, U.S. stock indexes rebounded over 1% as dovish comments by some U.S. Federal Reserve officials cooled expectations that the central bank would raise interest rates this month. The Dow Jones Industrial Average gained 239 points (+1.3%) to 18,325, the S&P 500 rose 31 points (+1.5%) to 2,159, and the Nasdaq Composite was up 85 points (+1.7%) to 5,211. However, these indexes have not fully recovered from Friday’s deep losses.
Federal Reserve Governor Lael Brainard pointed out that “the case to tighten policy preemptively is less compelling” in view of the current labor market situation. She also said that “today’s new normal counsels prudence in the removal of policy accommodation.”
As long as 101.45 is not broken, look for further rise to 102.65 and 103.05 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 102.65 and the second one at 103.05. In the alternative scenario, short positions are recommended with the first target at 101.15 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 100.90. The pivot point is at 101.45.
Resistance levels: 102.65, 103.05, 103.45
Support levels: 101.15, 100.80, 100.30
The material has been provided by InstaForex Company – www.instaforex.com
The post Technical analysis of USD/JPY for September 13, 2016 appeared first on forex-analytics.press.