Overview:
USD/JPY is trading with the bullish bias after hitting a two-month high of 100.15 Thursday. it is underpinned by weak yen sentiment as the Japanese 3Q GDP growth eased to +1.9% from +3.8% in 2Q, fueling speculation that the country would adopt further stimulus measures; and comments by Finance Minister Taro Aso that Japan must send signals to curb one-sided foreign exchange moves, suggesting any tentative strengthening of the yen would probably be met with pushback. USD/JPY is also supported by demand from Japan importers and investment trusts; yen-funded carry trades amid positive global risk sentiment (VIX fear gauge eased 1.12% to 12.38; S&P rose 0.48% overnight for record-high close of 1790.62) as Janet Yellen, President Obama's nominee to lead the central bank after Ben Bernanke in January, said in Thursday's Senate confirmation hearing that there are dangers to ending the central bank's $85 billion-a-month bond-buying program too soon. But USD/JPY gains are tempered by lower U.S. Treasury yields; weaker dollar sentiment after wider-than-expected U.S. September trade deficit of $41.8 billion, (versus forecast $39.1 billion deficit), lower-than-expected U.S. 3Q preliminary non-farm productivity gain of +1.9% (versus +2.4% forecast), U.S. initial claims for jobless benefits declined by less-than-expected 2,000 to 339,000 in the week ended Nov. 9 (versus forecast 332,000); Japan exporter sales; positions adjustment before weekend.
Technical comment:
Daily chart is positive-biased as MACD is bullish, stochastics stays elevated at overbought; the 5- and 15-day moving averages are advancing.
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 100.5 and the second target at 100.85. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 99.3 the breach of this target will move the pair further downwards and one may expect the second target at 98.85. The pivot point stands at 99.75.
Resistance levels:
100.55
100.85
101.25
Support levels:
99.3
98.85
98.55
