Overview:
USD/JPY is expected to trade in higher range. Spotlight on Monday is 14:00 GMT U.S. May ISM manufacturing PMI (expected to have risen to 55.6 from 54.9 in April). USD/JPY is underpinned by the yen-funded carry trades amid positive investor risk sentiment (VIX fear gauge eased 1.47% to 11.4) as U.S. stocks ended mostly higher Friday (S&P 500 hit all-time high 1,924.03 before closing up 0.18% at 1,923.57; Nasdaq off 0.13%), while final China May official manufacturing PMI came in stronger-than-expected at 50.8 versus 50.6 forecast and April’s 50.4, suggesting world’s second-largest economy may be stabilizing after a sluggish start to the year. USD/JPY is also supported by the demand from Japan importers, higher U.S. Treasury yields. But USD/JPY gains are tempered by the Japan exporter sales, weaker dollar sentiment (ICE spot dollar index last 80.41 versus 80.50 early Friday) as lower-than-expected final U.S. May University of Michigan’s consumer-sentiment index (came in at 81.9 versus 82.5 forecast), surprise 0.1% drop in U.S. April consumer spending (versus forecast for 0.1% increase), weaker-than-expected 0.3% rise in U.S. April personal income (versus +0.4% forecast) outweighed surprise rise in U.S. ISM Chicago PMI to 65.5 in May from 63.0 in April (versus forecast for drop to 61.0).
Technical comment:
Daily chart is mixed as MACD is bullish, but stochastics is in bearish mode, five and 15-day moving averages are meandering sideways.
Trading recommendation:
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 102.35 and the second target at 102.65. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.55. A breach of this target will push the pair further downwards and one may expect the second target at 101.40. The pivot point is at 101.75.
Resistance levels:
102.35
102.65
102.95
Support levels:
101.55
101.40
101.20
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Performed by Ahsan Aslam, Analytical expert InstaForex Group © 2007-2014 |
Technical analysis of USD/JPY for June 01, 20143
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