Overview:
USD/JPY is consolidating with bullish bias after hitting one-month low of 97.59 Wednesday. The rate is undermined by weaker USD sentiment (ICE spot dollar index last 81.66 vs. 81.82 early Wednesday) after Federal Reserve made no change to its monetary policy but changed its description of U.S. economic growth to "modest" from "moderate" and noted that low inflation is a concern as the economic recovery proceeds--suggesting the Fed might not proceed as quickly as previously expected in scaling down its bond-purchases. USD/JPY also weighed by smaller-than-expected rise in U.S. July ISM-Chicago PMI to 52.3 (versus 53.5 forecast) from June's 51.6; Japan exporter sales. But dollar sentiment is soothed by stronger-than-expected 1.7% annualized U.S. 2Q GDP growth (versus +0.9% forecast) and Automatic Data Processing's report showing larger-than-expected 200,000 increase in U.S. July private-sector jobs (versus +183,000 forecast). USD/JPY downside is also limited by demand from Japan importers; Bank of Japan's aggressive monetary easing measures to help reach its 2% inflation target; caution ahead of Friday's U.S. July Non-Farm Payrolls jobs report. Daily chart is negative-biased as MACD and stochastics is bearish, although latter is at oversold; five- and 15-day moving averages are declining.
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 and the second target at 99.35. You should keep in view short position below the pivot keep of the first target at 97.5, breach of this target will move the pair downward further may expect the second target at 97.2. The pivot point stands at 98.4.
Resistance levels:
R1 - 99
R2 - 99.35
R3 - 99.75
Support levels:
S1 - 97.5
S2 - 97.2
S3 - 96.8