USD/JPY is expected to trade in lower range as the bias remains bearish. The pair broke above its 50-period moving average and is challenging the 20-period one, while the relative strength index is above its neutrality level at 50. Nevertheless, 113.65 is playing a key resistance role, which should limit the upside potential. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
As long as 113.20 holds on the upside, look for a further drop to 112.05 and even 111.60 in extension.
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 112.05. A break below this target will move the pair further downwards to 111.60. The pivot point stands at 113.20. If 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 113.55 and the second one at 113.95.
Resistance levels: 113.95, 114.20, 114.50 Support levels: 112.05, 111.60, 111.30
The material has been provided by InstaForex Company - www.instaforex.com
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