FX.co ★ Technical analysis of USD/JPY for January 09, 2014

Overview:
The USD/JPY is in range-trade underpinned by positive dollar sentiment (ICE spot dollar index last 81.07 versus 80.86 early Wednesday) after ADP reported that U.S. private-sector jobs rose more-than-expected 238,000 in December (versus +200,000 forecast), its strongest increase in 13 months. The USD/JPY was also supported by higher U.S. Treasury yields; demand from Japan importers; expectations that the Bank of Japan will ease its monetary policy further ahead of Japan's national sales tax hike which is due in April. But the USD/JPY upside limited by Japan exporter sales; selling of yen crosses amid subdued risk appetite as U.S. stocks closed lower overnight (S&P off 0.02%, DJIA down 0.41%): caution ahead of Friday's U.S. December non-farm payroll report. There is muted reaction to latest Federal Open Market Committee minutes which indicated that the Federal Reserve planned to "proceed cautiously" in slowing down its monthly bond purchases and largely corroborated previous statements from Fed officials.

Technical comment:
Daily chart is still negative-biased as MACD and stochastics are in bearish mode.

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 105.1 and the second target at 105.4 in mind. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 104.2.The breach of this target will move the pair further downwards and one may expect the second target at 104. The pivot point stands at 104.6.

Resistance levels:
105.1
105.4
105.85
Support levels:
104.2
104
103.8