FX.co ★ Technical analysis of USD/JPY for April 4, 2014

Overview:

USD/JPY is expected to consolidate after hitting two-month high at 104.12 on Thursday as markets await 1230 GMT U.S. March non-farm payrolls (expected to have increased by 200,000) and unemployment rate (expected to have slipped to 6.6% from 6.7%). USD/JPY is supported by the broadly stronger dollar undertone (ICE spot dollar index last 80.45 versus 80.21 early Thursday) despite larger-than-expected U.S. jobless claims of 326,000 in week ended March 29 (versus 320,000 forecast), wider-than-expected U.S. February trade deficit of $42.3 billion (versus $38.6 billion deficit forecast) and weaker-than-expected rise in U.S. ISM non-manufacturing composite index to 53.1 in March from 51.6 in February (versus 53.5 forecast). USD/JPY is also supported by the demand from Japan importers and loose Bank of Japan monetary policy. But USD/JPY gains are tempered by the Japan exporter sales, selling of yen crosses amid diminished risk appetite (VIX fear gauge rose 2.14% to 13.37, S&P fell 0.11% overnight), lower U.S. Treasury yields and positions adjustment before weekend. 

Technical сomment: 
Daily chart is still positive-biased as MACD and stochastics are bullish, although latter is at overbought zone, five-day moving average is above 15 day MA and is advancing.   

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 104.10 and the second target at 104.45. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 103.40. A breach of this target will push the pair further downwards and one may expect the second target at 102.95. The pivot point is at 103.700.

Resistance levels: 
104.10 
104.45 
104.80

Support levels: 
103.40
102.95 
102.65