Overview:
USD/JPY is trading in higher range range. The rate is undermined by weaker dollar sentiment (ICE spot dollar index last 81.70 versus 81.76 early Wednesday) as lower-than-expected U.S. July PPI (came in unchanged versus +0.3% forecast) raised odds that the Federal Reserve could hold off winding down its $85 billion-a-month asset-purchase program in September. USD/JPY is also weighed by Japan exporter sales; selling of yen crosses amid negative risk sentiment (VIX fear gauge rose 5.93% to 13.04, S&P fell 0.52% overnight). But USD/JPY losses are tempered by demand from Japan importers; hopes that Japanese Prime Minister Abe was considering corporate tax cuts and expectations that Bank of Japan will further expand its monetary stimulus. Daily chart is still positive-biased as negative MACD histogram bars are contracting, stochastics is rising from oversold.
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 far as the price is above its pivot point, trading in higher range is most favorable and buy position is recommended above its pivot, with the first target at 98.85 and the second target at 99.15. You should keep in view short position below the pivot keep of the first target at 97.55, breach of this target will move the pair downward further and one may expect the second target at 96.95. The pivot point stands at 98.35.
Resistance levels:
R1 - 98.85
R2 - 99.15
R3 - 99.40
Support levels:
S1 - 97.55
S2 - 96.95
S3 - 96.55