Overview:
USD/JPY is trading in a range. USD/JPY is supported by Tokyo's win in race to host the 2020 Olympics; the yen trades amid improving risk appetite as the global growth outlook brightened after China's trade surplus widened more than expected to $28.6 billion in August (versus $20.4 billion forecast) from $17.8 billion in July, as exports increased 7.2% y/y (versus +6.0% forecast), while imports rose just 7.0% y/y (versus +11.7% forecast); demand from Japan importers. But USD/JPY upside is limited by negative dollar sentiment (ICE spot dollar index last 82.27 versus 82.63 early Friday) after U.S. August non-farm payrolls increased less-than-expected by 169,000 (versus +175,000 forecast), while July job gains were revised down to just +104,000 from +162,000, raising uncertainty whether the Federal Reserve would start to scale down its $85-billion-a-month bond-buying program at its Sept.17-18 meeting; lower U.S. Treasury yields; Japan exporter sales. The yen crosses are vulnerable to 01.30 GMT China August CPI (expected to rise 2.6% y/y versus July's +2.7%) and PPI data. Daily chart is mixed as five- & 15-day moving averages are advancing, MACD is bullish; but stochastics turned bearish and overbought.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, trading in a higher range is most favorable and a buy position is recommended above its pivot, with the first target at 100.2 and the second target at 100.45. You should keep in view short positions below the pivot. Keep the first target at 99.00. The breach of this target will move the pair downwards further and one may expect the second target at 98.5. The pivot point stands at 99.3.
Resistance levels:
R1 - 100.2
R2 - 100.45
R3 - 100.7
Support levels:
S1 - 99.00
S2 - 98.5
S3 - 98.25