USD/JPY is Under pressure. The pair shows further downside potential after its downward break out of the 20-period and 50-period moving averages, which play resistance roles and maintain the downside bias. The relative strength index is bearish below its neutrality level at 50 and lacks upward momentum. As long as 113.85 holds as resistance, a further downside to 113.05 and 112.80 is expected.
Recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 113.05. A break below this target will move the pair further downwards to 112.80. The pivot point stands at 113.85. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 114.20 and the second one at 114.60.
Resistance levels: 113.05, 112.75 and 112.45 Support levels: 114.20, 114.60, and 114.95.
