Overview:
USD/JPY is consolidating in higher range. USD/JPY is underpinned by weaker yen sentiment after Japan exports rose 11.5% on year in September--well below forecast of +16.1%--and posted a Y932.1 billion trade deficit in September, extending its run of shortfalls to a record 15th month and raising expectations of further official actions to weaken the yen to boost exports. USD/JPY also supported by demand from Japan importers; higher longer-dated U.S. Treasury yields. But USD/JPY gains are tempered by Japan exporter sales; expectations that the Federal Reserve will delay tapering its $85 billion-a-month bond-purchase program till early next year on the central bank's likely concern over another round of debt-ceiling discussions after Congress temporarily extend the debt ceiling through Feb. 7; Fed's Evans saying Monday the Fed would probably "need a couple of good labor reports and evidence of increasing growth" before starting tapering and "it's probably going to take a few months to sort that out." Other data: 14:00 GMT U.S. October Richmond Fed business activity survey, August construction spending (forecast +0.5%). Daily chart is mixed as MACD is bullish; but stochastics is in bearish mode.
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, a long position is recommended with the first target at 98.55 and the second target at 99. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 97.5. The breach of this target will move the pair further downwards and one may expect the second target at 97.1. The pivot point stands at 98.15.
Support levels:
97.5
97.1
96.5
Resistance levels:
98.55
99
99.35