Overview:
USD/JPY is trading with bullish bias after hitting four-year high of 99.99 this morning. The rate is underpinned by negative JPY sentiment as leaders of G-20 nations backed Japan's aggressive bond purchase program, recognizing that Japan's monetary stimulus measures are aimed at defeating deflation and not at weakening the yen. USD/JPY is also supported by demand from Japan importers and investment trusts; yen-funded carry trades amid improved investor risk appetite (VIX fear gauge eased 14.75% to 14.97; S&P rose 0.88% Friday)--risk sentiment was boosted after the International Monetary Fund said markets had overreacted to recent lackluster Chinese data and that China's economy remains on track to grow 8% this year; positive USD sentiment on higher U.S. equities. But USD/JPY gains tempered by Japan exporter sales.
Trading recommendations:
At the best-case scenario the pair is trading in higher ranges and if it continues the above mentioned behavior and is traded above its pivot point predicted, then buys with upside targets at 100.02 and 100.5 will be preferred where Pivot point stands at 98.95. In case the price moves in opposite direction and returns from its resistance or moves below its pivot point then it will be most favorably to trade in lower range and sell below the pivot point with first target at 98.38 and second target at 97.64.
Resistance and Support Levels:
R1) 100.02 R2) 100.5 R3) 101.45 (April 6, 2009 swing high)
S1) 98.38 S2) 97.62 (Thursday's low) S3) 97.21 (Wednesday's low)
