USD/JPY is under pressure and expected to continue its downside movement. The pair rebounded up to 102.80 yesterday before resuming a downtrend. Currently, while being capped by the 50-period (30-minute chart) moving average, the pair has broken below the lower Bollinger band as those bands are widening, suggesting an acceleration to the downside. At the same time the intraday relative strength index has crossed below the over-sold level of 30, indicating imminent downward momentum for the pair. The first downside target at 101.75 is in sight. And a break below this level would trigger a further decline toward 101.40. Key resistance has been lowered to 102.80 (around yesterday's high). U.S. markets were closed on Monday to observe the Independence Day holiday.
On the forex front, the U.S. dollar remained under pressure as EUR/USD rose 0.2% to 1.1154 and GBP/USD rebounded 0.2% to 1.3289. On the other hand USD/JPY edged up to 102.55 from 102.51 a day earlier.
Recommendations:
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 101.70. A break below this target will move the pair further downwards to 101.40. The pivot point stands at 102.80. 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 103.10 and the second one, at 103.40.
Resistance levels: 103.10, 103.40, 104.00
Support levels: 101.70, 101.40, 101
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