USD/JPY is supported by a rising trend line. The pair bounced off its ascending trend line support, and is accelerating on the upside. The upward momentum is further reinforced by its rising 20-period moving average, which plays a support role, and maintains the upside bias. The relative strength index stands firmly above its neutrality level at 50.
U.S. economic data came out to be better-than-expected. The Commerce Department reported that retail sales rose 0.8% on month in October (vs. +0.6% expected). The Federal Reserve Bank of New York posted November Empire Manufacturing Index of +1.5 (vs. -2.5 expected). Meanwhile, the import price index increased 0.5% on month in October (vs. +0.4% expected).
As long as 107.7 is support, look for a further advance toward 109.85 and even 110.60 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 109.85 and the second one at 110.60. In the alternative scenario, short positions are recommended with the first target at 106.90 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 106.15. The pivot point lies at 107.70.
Resistance levels: 109.85, 110.60, 111.15
Support levels: 106.90, 106.15, 104.95
The material has been provided by InstaForex Company - www.instaforex.com