USD/JPY is expected to
consolidate with bullish bias after hitting seven-year high 115.52 on Thursday.
USD/JPY is underpinned by the positive dollar sentiment (ICE spot dollar index
last 88.06 after hitting four-year high 88.146 overnight, versus 87.48 early
Thursday) on fewer-than-expected 278,000 U.S. jobless claims in week ended Nov.
1 (versus forecast 285,000) and stronger-than-expected 2.0% annual rate
increase in U.S. 3Q non-farm productivity (versus forecast +1.5%). USD/JPY is
also supported by the higher U.S. Treasury yields (10-year at 2.382% versus
2.346% late Wednesday; demand from Japan importers; ultra-loose Bank of Japan’s
monetary policy; yen-funded carry trades amid positive risk appetite (VIX fear
gauge eased 3.53% to 13.67; S&P 500 hit record-high 2,031.61 overnight
before closing up 0.38% at 2,031.21) on positive U.S. data and rising hopes for
more stimulus in Europe. But USD/JPY gains are tempered by the Japan exporter
sales and positions adjustment before weekend. Daily chart is positive-biased
as MACD indicator is bullish, slow stochastic measure stays elevated at
overbought levels, 5 and 15-day moving averages are advancing.
Daily chart is mixed as MACD is bullish, 5 and 15-day moving averages
are advancing but stochastics is turned bearish at overbought zone,
inside-day-range pattern was completed on Tuesday.
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 is keeping above its pivot point, a long position is recommended with the
first target at 116 and the second target at 116.65. In an alternative
scenario, if the price moves below its pivot points, short positions are
recommended with the first target at 113.80. A break of this target would push
the pair further downwards and one may expect the second target at 113. The
pivot point is at 114.75.
The material has been provided by InstaForex Company – www.instaforex.com