27.03.201417:16 Forex Analysis & Reviews: Technical analysis of USD/JPY for March 27, 2014

Overview:

USD/JPY is expected to trade in lower range. It is undermined by the flows to haven JPY and unwinding of the JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 6.49% to 14.93, S&P fell 0.7% overnight) on prospect of harsher sanctions on Russia over Ukraine crisis following U.S. President Obama's speech in Brussels. USD/JPY is also weighed by the lower U.S. Treasury yields and Japan's exports sales. But the U.S. dollar sentiment is soothed by the stronger-than-expected 2.2% increase in the U.S. February durable goods orders (versus +0.8% forecast), rise in Markit U.S. flash services PMI to 55.46 in March from 53.34 last month. USD/JPY losses are also tempered by the demand from the Japanese importers and loose Bank of Japan monetary policy.

Technical сomment:
Daily chart is mixed as MACD is flat, stochastics is neutral, 15-day moving average is meandering sideways.

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. Short position is recommended with the first target at 101.75. A breach of this target will move the pair further downwards to 101.45. The pivot point stands at 102.45. In case the price moves in the opposite direction, bounces back from support level, and then moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 102.65 and the second target at 102.85.

Resistance levels:
102.65
102.85
103.15

Support levels:
101.75
101.45
101