05.02.201417:49 Forex Analysis & Reviews: Technical analysis of USD/JPY for Feburary 05, 2014

Long-term review

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Overview:

USD/JPY is expected to trade in lower range after hitting two-month low 100.76 Tuesday.It is underpinned by yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 10.87% to 19.11, S&P rose 0.76% overnight) on rise in U.S. ISM-NY current business conditions index to 64.4 in January from 63.8 in December, smaller-than-expected 1.5% drop in U.S. December factory orders (versus minus 1.8% forecast), while emerging-market currencies stabilized against the dollar Tuesday after recent sell-off. USD/JPY is also supported by the demand from Japan importers,rebounding of U.S. Treasury yields. But USD/JPY gains are tempered by Japan exporter sales.

Technical сomment:
Daily chart is still negative-biased as MACD and stochastics are bearish, although latter is at oversold zone,5 and 15-day moving averages are declining.

Trading recommendation:

The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. A short position is recommended with the first target at 100.7 in mind. A breach of this target would move the pair further downwards to 100.4. The pivot point stands at 101.95. In case the price moves in the opposite direction, bounces back from support, and then moves above its pivot point, it is most favourably expected to move further to the upside. In that scenario, a long position is recommended with the first target at 102.6 and the second target at 102.9.

Resistance levels:
102.6
102.9
103.25

Support levels:
100.7
100.4
100.1

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