Overview:
USD/JPY is consolidating after hitting seven-day low 97.55 on Friday. The rate is undermined by soft dollar sentiment amid expectations that the Federal Reserve will delay tapering its $85 billion-a-month bond-purchase program till early next year after Congress temporarily extend the debt ceiling through Feb. 7. USD/JPY also weighed by lower longer-dated Treasury yields; Japan exporter sales. But USD/JPY loses are tempered by demand from Japan importers; yen-funded carry trades amid positive risk appetite (VIX fear gauge eased 3.36% to 13.04; S&P rose 0.65% Friday to hit fresh all-time high) on expectations that the Federal Reserve will maintain its stimulus policies until February when the next round of debt-ceiling discussions have been resolved; optimism over global growth after China, the world's second-largest economy, posted 7.8% GDP expansion in the third quarter, accelerating from 7.5% growth in the second quarter; positions adjustment ahead of tomorrow's U.S. September non-farm payrolls and unemployment data. Daily chart is mixed as MACD is bullish; but stochastics is in bearish mode.
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, a long position is recommended with the first target at 98.55 and the second target at 99. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 97.5. The breach of this target will move the pair further downwards and one may expect the second target at 97.1. The pivot point stands at 98.05.
Support Levels:
97.5
97.1
96.5
Resistance Levels:
98.55
99
99.35
