USD/JPY is expected to trade with bullish bias. The pair is rebounding at its key support at 101.70, and is likely to post further advance to 103.85 at first. The process of higher highs and lows remains intact, which should confirm a positive outlook. Besides, the relative strength index is bullish above its neutrality area at 50.
On Tuesday, US stocks stayed in positive territory as the country picked its next president. The Dow Jones Industrial Average advanced 73 points (+0.4%) to 18,332, the S&P 500 added 8 points (+0.4%) to 2,139, and the Nasdaq Composite was up 27 points (+0.5%) to 5,193.
Mining firm Freeport-McMoRan surged 7.1% as copper jumped 3.1%, the biggest one-day gain in almost a year, to $2.3815 a pound. Boosted by an improved outlook on demand from China, the industrial metal posted a 12-day winning streak.
Hence, as long as 102.05 is not broken, expect a new rise to 103.85 and 104.90 in extension.
Trading Recommendation: 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 103.85 and the second one at 104.90. In the alternative scenario, short positions are recommended with the first target at 101.70 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 101.20. The pivot point lies at 102.05.
Resistance levels: 103.85, 104.90, 105.40
Support levels: 101.70, 101.20, 100.80
The material has been provided by InstaForex Company - www.instaforex.com