Overview:
USD/JPY is trading in higher range after hitting two-month low of 94.98 on EBS Friday. The rate is underpinned by positive dollar sentiment after U.S. non-farm payrolls rose more-than-expected 175,000 in May (vs +169,000 forecast); yen-funded carry trades amid positive risk sentiment (VIX fear gauge eased 8.96% to 15.14; S&P gained 1.28% Friday) as investors bet Federal Reserve would not scale back its $85 billion-a-month bond-purchase program anytime soon after U.S. May unemployment rate came in higher-than-expected at 7.6% (vs 7.5% forecast). USD/JPY is also supported by higher U.S. Treasury yields; demand from Japan importers and investment trusts; Bank of Japan's aggressive easing measures to help reach its 2% inflation target. But risk sentiment is dented after smaller-than-expected increase in China's May exports (rose 1.0% vs +5.6% forecast), surprise drop in China's May imports (fell 0.3% vs +5.0% forecast) and soft Chinese May CPI data (up 2.1% on year vs +2.5% forecast)--raising fears of slowdown in world's second largest economy. USD/JPY gains are also tempered by Japan exporter sales. Daily chart is mixed as MACD is bearish, five-day moving average is below 15-day MA and declining; but stochastics is turning bullish at oversold, bullish hammer candlestick pattern was completed on Friday.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in higher range as far as it remains above its pivot point. As far as the price is above its pivot point, trading in higher range is most favorable and buy position is recommended above its pivot with the first target at 99.5 and the second target at 100.4. You should keep in view short position below the pivot keep of the first target at 96.9, breach of this target will move the pair downward further and ome may expect the second target at 96.3. The pivot point stands at 97.5.
Resistance Levels:
R1 - 99.5
R2 - 100.4
R3 - 100.8
Support Levels:
S1 - 96.9
S2 - 96.3
S3 - 96