Overview:
USD/JPY is consolidating with bullish bias after hitting a three-week low of 97.76 Wednesday. Undermined by negative dollar sentiment (ICE spot dollar index last 80.19 versus 81.15 early Wednesday) after the Federal Reserve unexpectedly kept its $85-billion-a-month bond-buying program unchanged and cut its forecast for U.S. economic growth in 2013 to 2.0%-2.3%, while Chairman Bernanke implied he is no longer committed to slowing purchases this year and any move would depend on incoming economic data. USD/JPY also weighed by lower U.S. Treasury yields; concerns over upcoming political fight over raising the U.S. debt ceiling Mr. Bernanke warned that a government shutdown or failure to raise the federal debt ceiling could have "very serious consequences" for the economy; lower-than-expected 0.9% rise in U.S. August housing starts (versus +2.1% forecast); Japan exporter sales. But USD/JPY losses tempered by demand from Japan importers; buying of yen crosses amid positive risk sentiment (S&P surged 1.22% overnight to record high; VIX fear gauge fell 6.47% to 13.59) on Fed's continued stimulus.
Trading recommendations:
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, trading in a higher range is the most favorable and a buy position is recommended above its pivot, with the first target at 99.1 and the second target at 99.35. You should keep in view short positions below the pivot. Keep the first target at 97.75. The breach of this target will move the pair downwards further and one may expect the second target at 97.4. The pivot point stands at 98.15.
Resistance levels:
99.1
99.35
99.65
Support levels:
97.75
97.4
97
