USD/JPY is гnder pressure.Overnight U.S. stocks traded higher as the Federal Reserve kept rates steady and investors anticipated the central bank wouldn't raise rates in a hurry. The Dow Jones Industrial Average rose 0.3% to 18,041, and the S&P 500 added 0.2% to 2,095. Meanwhile, the Nasdaq Composite fell 0.5% to 4,863, as Apple Inc.'s stock tumbled over 6% on disappointing quarterly results.
Nymex crude oil gained 2.9% to $45.33 a barrel, gold was up 0.3% at $1,246 a troy ounce, and the benchmark 10-year Treasury yield declined to 1.861% from 1.931% in the previous session.
Regarding forex trading, the U.S. dollar was little changed after the Fed announced its rate decision. The Wall Street Journal Dollar Index edged up 0.1% to 86.34.
The Australian dollar was hit hard by yesterday following a subdued inflation report (1Q CPI +1.3% year-on-year vs +1.7% expected, and -0.2% quarter-on-quarter vs +0.2% expected). AUD/USD plunged 2.1% to 0.7583.
At the same time, EUR/USD rose 0.2% to 1.1319, GBP/USD fell 0.3% to 1.4538, USD/JPY gained 0.2% to 111.45, and USD/CAD edged lower to 1.2597.
Currently, it is trading around the 20-period moving average while being capped by the descending 50-period one. There is obviously a lack of upward momentum. If the pair breaks below the first downside target at 107.50, it should sink further towards the next support at 107.
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 107.50. A break of this target will move the pair further downwards to 107. The pivot point stands at 109.50. 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 109.90 and the second target at 110.65.
Resistance levels: 109.90, 110.65, 111.10
Support levels: 107.50, 107, 106.50
The material has been provided by InstaForex Company - www.instaforex.com