Overview:
USD/JPY is trading in lower range. The rate is undermined by negative dollar sentiment as Automatic Data Processing's report of lower-than-expected 135,000 new private-sector jobs in May (vs 170,000 forecast) and drop in U.S. ISM employment index to 50.1 last month from April's 52.0 foreshadowed possibly disappointing U.S. May non-farm payrolls report due on Friday; also, U.S factory orders for April rose smaller-than-expected 1% on month (vs +1.5% forecast)--increasing the odds that Federal Reserve would not scale back its $85 billion-a-month bond-purchase program anytime soon. USD/JPY is also weighed by lower U.S. Treasury yields; Japan exporter sales; unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 7.56% to 17.5; S&P fell 1.38% overnight) as Wall Street followed Nikkei lower after Japanese Prime Minister Abe failed to meet the market's high expectations when he announced his growth strategy Wednesday. But dollar sentiment soothed as U.S. Federal Reserve's Beige Book survey struck a more optimistic note--said the U.S. economy has continued to expand at a modest rate, helped by a resurgent housing industry and steady gains in manufacturing. USD/JPY losses are also tempered by demand from Japan importers; Bank of Japan's aggressive easing measures to help reach its 2% inflation target. Plosser speech. Daily chart is negative-biased as MACD is bearish, stochastics is staying suppressed at oversold, five-day moving average is below 15-day MA and declining.
Trading recommendations:
The pair is trading below its pivot point. The pair is likely to trade in lower range as far as it remains below its pivot point. Short position is recommended with the first target at 98.85 in view, breach of this target will move further the pair downward and you should expect the second target at 98.45. Pivot point stands at 99.7. In case the price moves in opposite direction and returns from its support and moves above its pivot point, then trading in higher range is the most favorable and buy position is recommended above its pivot with the first target at 100 and the second target at 100.4.
Support Levels:
S1 - 98.85
S2 - 98.45
S3 - 98
Resistance Levels:
R1 - 100
R2 - 100.4
R3 - 100.8
