USD/JPY is expected to post some further gains upward. The pair shows further upside potential after its upward breakout of a short-term declining trend line, which emerged on April 14. The relative strength index is supported by a rising trend line and is above its neutrality level at 50. The rising 20-period and 50-period moving averages are playing support roles and maintain the upside bias.
As long as 108.50 holds on the downside, look for a further advance toward 109.50 and even 109.85 in extension.
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 109.50 and the second one at 109.85. In the alternative scenario, short positions are recommended with the first target at 108.20, if the price moves below its pivot points. A break of this target may push the pair further downwards, and one may expect the second target at 108.00. The pivot point is at 108.50.
Resistance levels: 109.50, 109.85, and 110.15
Support levels: 108.20, 108.00, and 107.35
