USD/JPY is under pressure. The pair has broken below its key support at 105.05, which should confirm a bearish reversal on an intraday basis. The 20-period moving average is turning down, and acts as a resistance role. The relative strength index is negative below its neutrality area at 50.
On Friday, U.S. stocks swung from gains, which were driven by stronger-than-expected third-quarter GDP growth, to losses, as the FBI said, it is reviewing new evidence in connection with its investigation of Hillary Clinton's email server, casting uncertainty over the market. The U.S. Commerce Department reported that GDP expanded at an inflation- and seasonally-adjusted 2.9% annual rate in the third quarter, the fastest growth in two years and higher than +2.5% expected.
However, stocks pulled back in afternoon trading as FBI director James Comey pointed out, in a letter to Congress, that the FBI had discovered new emails in an unrelated case that "appear to be pertinent to the investigation" into whether Mrs. Clinton or her aides mishandled classified information while she was serving in the State Department. The U.S. presidential election is only less than two weeks away.
Hence, as long as 105.55 is not surpassed, likely decline to 104.35 & 104.00 in extension.
Trading 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 104.35. A break below this target will move the pair further downwards to 104. The pivot point stands at 105.55. In case 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 105.95 and the second one at 106.30.
Resistance levels: 105.95, 106.30, 106.50
Support levels: 104.35, 104.00, 103.65
The material has been provided by InstaForex Company - www.instaforex.comFrom www.instaforex.com http://ift.tt/2eebSg3
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