FX.co ★ USD/JPY: Under pressure

Overview:
USD/JPY is consolidating with risks skewed higher as markets await Bank of Japan's monetary policy decision: No major new easing steps are expected, but market participants will pay close attention to BOJ's release of its half-yearly report on its inflation and economic growth forecasts. Spotlight also on 1230 GMT U.S. 1Q advance estimate GDP (seen to have grown 3.2%). USD/JPY is underpinned by positive USD sentiment as latest U.S. weekly jobless claims fell more than expected to 339,000; yen-funded carry trades amid positive investor risk appetite (S&P rose 0.4% overnight) as U.K. 1Q GDP data beat forecast, while expectations maintained for continued stimulus from the world's major central banks as speculation mounts that the European Central Bank will cut interest rates next week. USD/JPY is also supported by weak JPY sentiment on Bank of Japan's aggressive easing measures to help reach its 2% inflation target in two years; demand from Japan importers and investment trusts. But USD/JPY gains tempered by Japan exporter sales; positions adjustment before weekend. Daily chart is mixed as MACD is bullish, but stochastics has turned bearish at overbought.

Trading recommendations:
The pair is trading below its pivot point at 0.9441. The pair is likely to trade in lower range as far as it remains below its pivot point. Short position is recommended with the first target at 98.36 in view, breach of this target will further move the pair downward and expect the second target at 98.10. Pivot point stands at 99.25. In case the price moves in opposite direction and returns from its support and moves above its pivot point then it will be most favorably to trade in higher range and buy position is recommended above its pivot with first target at 99.57 and second target at 99.77.

Resistance levels:
R1 - 99.57 (Thursday's high)
R2 - 99.77 (Wednesday's high)
R3 - 99.99 (Monday's four-year high)
Support levels:
S1 - 98.36
S2 - 98.10 (April 19 low)
S3 - 97.62 (April 18 low)