Overview:
USD/JPY is to consolidate with bullish bias after hitting six-month high 102.28 this morning. Liquidity is thin later in global day as the financial markets in U.S. are shut for Thanksgiving holiday. USD/JPY is underpinned by weaker yen sentiment after Bank of Japan board member Sayuri Shirai said the BOJ was open to taking further easing steps if economic growth stumbled and deflationary pressures returned; positive dollar sentiment (ICE spot dollar index last 80.72 versus 80.65 early Wednesday) on smaller-than-expected drop in U.S. ISM-Chicago PMI to 63.0 in November from 65.9 in October (versus forecast 60.0); higher-than-expected revision to University of Michigan final consumer sentiment index to 75.1 from preliminary 72.0 (versus forecast 73.5); surprise drop in U.S. jobless claims in the week ended Nov. 23 to 316,000 from revised 326,000 in the previous week (versus forecast for rise to 330,000); unexpected 0.2% rise in Conference Board U.S. index of leading economic indicators in October (versus forecast for no change) raised odds that the Federal Reserve might start tapering its $85 billion-a-month bond-buying program next month. USD/JPY is also supported by higher U.S. Treasury yields, yen-funded carry trades amid improved investor risk sentiment (S&P rose 0.25% overnight, closing near all-time highs), demand from Japan importers, and investment trusts. But USD/JPY gains are tempered by Japan exporter sales.
Technical comment:
Daily chart is positive-biased as MACD is bullish, stochastics stays elevated at overbought; 5- & 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 102.5 and the second target at 102.9. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.15 the breach of this target will move the pair further downwards and one may expect the second target at 100.95. The pivot point stands at 101.6.
Resistance levels: h
102.5
102.9
103.25
Support levels:
101.15
100.95
100.65
