Overview:
USD/JPY is consolidating after hitting near-six-month high 101.91 on Monday. The rate is undermined by selling of yen crosses amid diminished investor risk appetite (VIX fear gauge rose 4.32% to 12.79, S&P fell 0.13% overnight) on surprise 0.6% drop in U.S. October pending home sales index to 102.1, the lowest level since last December (versus forecast +1.1%), while the Dallas Fed general business activity index fell to 1.9 in November from 3.6 in October. USD/JPY is also weighed by lower U.S. Treasury yields; Japan exporter sales. But USD/JPY losses are tempered by demand from Japan importers; soft yen sentiment amid expectations that the Bank of Japan will take additional easing measures to counter a consumption-tax rise next April.
Technical comment:
Daily chart is still positive-biased as MACD and stochastics are bullish, although latter is at overbought; 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 101.7 and the second target at 102. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 100.95 the breach of this target will move the pair further downwards and one may expect the second target at 100.65. The pivot point stands at 101.3.
Resistance levels:
101.7
102
102.5
Support levels:
100.95
100.65
100.35
