USD/JPY is expected to continue its upside movement. The pair stands firmly above its horizontal support at 103.35, which should limit the downside potential. At the same time, the rising 50-period moving average is playing a support role, and should continue to push the prices higher. Besides, the relative strength index lacks downward momentum.
On Wednesday, U.S. stock indexes closed slightly higher as expectations for the timing of the next rate increase were largely unchanged after the release of the minutes of the Federal Reserve's September meeting. The Dow Jones Industrial Average added 15 points (+0.1%) to 18,144, the S&P 500 edged up 2 points (+0.1%) to 2,139, while the Nasdaq Composite was down 7 points (-0.2%) to 5,239.
Real estate and utilities shares performed the best, while healthcare and energy shares ended in negative territory. Humana Inc shed 5.1% after reporting that U.S. health authorities cut the quality rating on the company's Medicare plans. Cisco Systems dropped 2.3% as rival Ericsson posted a 94% plunge in third quarter profits.
The Fed said in the minutes, "The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives. Several members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfolded about as expected, it was noted that a reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation."
Therefore, as long as 103.35 is not broken, the prices are likely to rise to 104.10 at first, if breakout, look for further advance toward 104.65 as possible.
Trading Recommendation: 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 104.10 and the second one at 104.65. In the alternative scenario, short positions are recommended with the first target at 103.05 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 102.75. The pivot point lies at 103.35.
Resistance levels: 104.10, 104.65, 105.25
Support levels: 103.05, 102.75, 102.40
The material has been provided by InstaForex Company - www.instaforex.comFrom www.instaforex.com http://ift.tt/2dTXOb8
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