FX.co ★ Technical analysis of USD/JPY for October 03, 2014

Fundamental Overview:

USD/JPY is expected to consolidate with bearish bias after hitting two-week low 108.01 on Thursday as markets await 1230 GMT U.S. September non-farm payrolls (expected to have increased by 215,000) and unemployment rate (expected to stay unchanged at 6.1%). USD/JPY is undermined by the broadly weaker USD undertone (ICE spot dollar index last 85.62 versus 85.91 early Thursday) and subdued risk appetite (S&P 500 closed roughly flat at 1,946.17 overnight) as caution prevails before U.S. jobs report, while fewer-than-expected 287,000 U.S. jobless claims in week ended Sept. 27 (versus forecast 297,000) offsets bigger-than-expected 10.1% drop in U.S. August factory orders (versus forecast -9.3%), Japanese Vice Finance Minister Minorikawa reported saying Thursday that weakness in the JPY is hurting some companies by driving up energy prices and Japan exporter sales. But USD/JPY losses are tempered by the ultra-loose Bank of Japan's monetary policy, demand from Japan importers and higher U.S. Treasury yields (10-year at 2.435% versus 2.402% late Wednesday) and positions adjustment before weekend.

Technical comment: 
 Daily chart is negative-biased as MACD and stochastics is in bearish mode,bearish parabolic stop-and-reverse signal was hit on Thursday.   

Trading recommendations: 
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 108.60. A break of this target will move the pair further downwards to 108.30. The pivot point stands at 109.25. In case the price moves in the opposite direction and bounces back from the support level, then it will move above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 109.55 and the second target at 110.

Resistance levels: 
109.55 
110 
110.35

Support levels: 
108.60
108.30 
107.95