USD/JPY is expected to trade with a bullish bias. The pair broke above its 50-period moving average with strong momentum and is holding on the upside. The relative strength index is supported by a bullish trend line (since Jan 27) and stands firmly above its neutrality level at 50. The U.S. Commerce Department reported that GDP rose 1.9% annualized on quarter in the fourth quarter (vs. +2.2% expected, +3.5% in the third quarter).
In addition, 114.00 plays a key support role, which should limit downside potential. As long as this key level is not broken, look for a further rise to 115.30 and even 115.80 in extension.
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 115.30 and the second one at 115.80. In the alternative scenario, short positions are recommended with the first target at 113.55 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 113.10. The pivot point is at 114.00.
Resistance levels: 115.30, 115.80, 116.25 , Support levels: 113.55, 113.10, 112.75
The material has been provided by InstaForex Company - www.instaforex.com
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