USD/JPY is expected to trade with bearish bias as key resistance stands at 102.45. The pair remains under pressure after a failed attempt to break above its key resistance at 102.45 (Sept. 18 top), and the upside potential should be limited by this threshold. Additionally, the relative strength index lacks upward momentum.
The benchmark 10-year U.S. Treasury yield edged up to 1.705% from 1.703% Thursday. Nymex crude sank 2.0% to a one-month low of $43.03 a barrel. Gold lost another 0.3% to $1,310 an ounce and silver was down 0.9% to $18.77 an ounce.
The U.S. Labor Department reported that CPI grew 0.2% on month in August (vs. +0.1% expected) and was up 1.1% on year (vs. +1.0% expected). On the other hand, the University of Michigan Consumer Sentiment Index remained unchanged at 89.8 in September (vs. 90.6 expected).
To sum up, as long as 102.45 holds on the upside, the pair is likely to drop to 101.45 at first. A break below this level would open the path to further weaknesses toward 101.15.
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 101.45. A break below this target will move the pair further downwards to 101.15. The pivot point stands at 102.45. 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 102.75 and the second one at 103.00.
Resistance levels: 102.75, 103.00, 103.35
Support levels: 101.45, 101.15, 100.80
The material has been provided by InstaForex Company - www.instaforex.com