USD/JPY is expected to trade in a higher range. Currently trading at 98.189, the US dollar index stays firm on the upside after getting a boost from comments made by Atlanta Federal Reserve President Dennis Lockhart, who confirmed his support for an interest rate hike in September. US 10-year Treasury yield hit 2.22% then, and is now at 2.23%. USD/JPY maintains its strong upward momentum climbing with the support of 20-period intraday moving average. The intraday RSI is well directed within the buying area between 50 and 70. The first upside target at 124.60 (around the high of July 30) is in sight. The second upside target is set at 124.80.
Technical comment:
The daily chart is still negative-biased as the MACD and stochastics are bearish, five-day moving average is below 15-day moving average and is declining.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price keeps above its pivot point, long positions are recommended with the first target at 124.60 and the second target at 124.80. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 123.70. A break of this target would push the pair further downwards, and one may expect the second target at 123.50. The pivot point is at 123.95.
Resistance levels: 124.60 124.80 125.15
Support levels: 123.70 123.50 123.30
The material has been provided by InstaForex Company - www.instaforex.com