Overview:
USD/JPY is trading in lower range. The rate is undermined by profit-taking on yen-shorts as market participants pared exposure ahead of Federal Reserve Chairman Bernanke's testimony before U.S. Joint Economic Committee and release of U.S. Federal Open Market Committee minutes, both on Wednesday; weaker dollar sentiment after Fed's Evans said there're no signs the U.S. central bank will turn off its monetary stimulus measures anytime soon, and that more time is needed to assess labor-market progress; drop in Chicago Fed's National Activity Index to minus 0.53 in April from minus 0.23 in March; lingering effect from Japan Economy Minister Akira Amari's comment Sunday that it is being said the correction of strong yen is largely completed and further weakening of the currency would have a negative impact on peoples' lives. USD/JPY is also weighed by Japan exporter sales. But USD/JPY losses tempered by demand from Japan importers and investment trusts; Bank of Japan's aggressive easing measures to help reach its 2% inflation target. Daily chart is mixed as MACD is bullish, but stochastics has turned bearish at overbought.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in higher range as far as it remains above its pivot point. As far as the price is above its pivot point, trading in higher range is most favorable and buy position is recommended above its pivot with the first target at 103.05 and the second target at 103.3. You should keep in view short position below the pivot keep of the first target at 101.25, breach of this target will move the pair downward further and expect the second target at 100.85. The pivot point stands at 101.95.
Support Levels:
S1 - 102.00 (Monday's low)
S2 - 101.83 (Thursday's low)
S3 - 101.25 (May 14 low)
Resistance Levels:
R1 - 103.9
R2 - 103.32 (Friday's four-and-a-half year high)
R3 - 103.7
