Overview:
USD/JPY is expected to consolidate in higher range as markets await 1330 GMT U.S. January non-farm payrolls (expected to have increased by 189,000) and unemployment rate (expected to have slipped to 6.6% from Decembe r's 6.7%). USD/JPY is underpinned by yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 13.63% to 17.23; S&P gained 1.24% overnight) as bigger-than-expected 20,000 drop in U.S. jobless claims to 331,000 in week ended Feb. 1 (versus 335,000 forecast) raised optimism for today's U.S. payrolls report. USD/JPY also supported by higher U.S. Treasury yields and demand from Japan importers. But USD/JPY gains are tempered by Japan exporter sales, weaker dollar sentiment (ICE spot dollar index last 80.89 versus 81.04 early Thursday) after smaller-than-expected 3.2% rise in U.S. 4Q non-farm productivity (versus +3.3% forecast), wider-than-expected U.S. December trade deficit of $38.70 billion (versus $35.9 billion deficit forecast) and positions adjustment before weekend.
Technical сomment:
Daily chart is mixed as MACD is bearish, but stochastics is bullish in oversold zone.
Trading recommendation:
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 102.6 and the second target at 102.9. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.2. A breach of this target will push the pair further downwards and one may expect the second target at 100.75. The pivot point is at 101.65.
Resistance levels:
102.6
102.9
103.25
Support levels:
101.2
100.75
100.4