USD/JPY is expected to extend its upside movement. The pair validated an inverted head-and-shoulder pattern and is heading upward. The upside momentum is further reinforced by its rising 20-period and 50-period moving averages, which play support roles and maintain the upside bias. The relative strength index broke above the bearish trend line, and is above its neutrality level at 50.
Therefore, as long as 113.15 is support, look for a further rise towards 114.00 and even 114.55 in extension.
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 114.00 and the second one at 114.55. In the alternative scenario, short positions are recommended with the first target at 112.75 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 112.45. The pivot point is at 113.15.
Resistance levels: 114.00, 114.55, 114.95 , Support levels: 112.75, 112.45, 112.00
The material has been provided by InstaForex Company - www.instaforex.com