Overview:
USD/JPY is trading in higher range. USD/JPY is supported by reduced safe-haven appeal of yen and yen-funded carry trades amid positive global risk sentiment (VIX fear gauge eased 2.57% to 12.49; S&P rose 0.81% overnight to close at record high 1,782.00) on speculation that comments to be made by Janet Yellen--seen as a proponent of easy-money policies--at Thursday's Senate confirmation hearing would be bullish for equities. That was confirmed as Ms. Yellen, in prepared remarks released after the market's close, defended the Fed's bond-buying and said the central bank "has more work to do" to regain what the U.S. economy had lost since the depths of the recession. Inflation remains below the central bank's 2% target and will likely remain low for some time, Ms. Yellen said, raising odds that the Fed might not start tapering its $85 billion-a-month bond-buying program before the end of this year. USD/JPY is also supported by demand from Japan importers and investment trusts. But USD/JPY gains are tempered by lower U.S. Treasury yields; Japan exporter sales; weaker dollar sentiment on Yellen's dovish comments.
Techncial comment:
Daily chart is mixed as MACD is bullish, 5- and 15-day moving averages are advancing; but stochastics is turning bearish at overbought.
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 100.2 and the second target at 100.55. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 98.85 the breach of this target will move the pair further downwards and one may expect the second target at 98.55. The pivot point stands at 99.3.
Resistance levels:
100.2
100.55
100.85
Support levels:
98.85
98.55
98.25
