USD/JPY is expected to continue its advance. Overnight, the US stocks posted broad gains led by shares in financial, automobiles, consumer, and real estate sectors. The Dow Jones Industrial Average rose 1.3% to 16697, the S&P 500 added 1.1% to 1951, and the Nasdaq Composite was up 0.9% to 4582.
Nymex crude oil rose another 2.9% to $33.07 a barrel, gold edged up 0.4% to $1234 an ounce, while the benchmark 10-year Treasury yield fell to 1.699% from 1.748%.
On the forex front, the US dollar turned soft against most other major currencies. EUR/USD edged up 0.1% to 1.1021, GBP/USD rebounded 0.3% to 1.3962, AUD/USD gained 0.5% to 0.7231, and NZD/USD surged 1.0% to 0.6718. Boosted by rallying oil prices, the Canadian dollar kept strengthening against the greenback with USD/CAD plunging 1.3% to 1.3529. On the other hand, USD/JPY increased 0.7% to 112.98. The pair continues on its rebound being supported by the ascending 20-period (30-minute chart) moving average, which stands well above the 50-period one. Currently, the pair is trading around the upper Bollinger band as those bands are widening. Also, the intraday relative strength index is well placed within the buying area between 50 and 70 lacking downward momentum. The pair is therefore expected to advance further with 113.20 as the first upside target and 113.60 as the second one.
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 113.20 and the second one at 113.60. In the alternative scenario, short positions are recommended with the first target at 111.95 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 111.30. The pivot point is at 112.40.
Resistance levels: 113.20, 113.60, 114
Support levels: 111.95, 111.30, 111.00
The material has been provided by InstaForex Company - www.instaforex.com