Fundamental outlook:
USD/JPY is expected to trade in a lower range. It is undermined by the weaker dollar sentiment (ICE spot dollar index last 96.94 versus 97.31 early Friday) after the report on the US durable goods published in March (excluding transportation goods) showed a decline by 0.2% (versus forecast +0.3%), while orders for non-defense capital goods excluding aircraft slid 0.5% (versus forecast +0.3%). USD/JPY is also weighed by the lower US Treasury yields (10-year slipped 3.0 bps Friday to 1.917%) and Japan export sales. But USD/JPY losses are tempered by demand from Japan importers, ultra-loose Bank of Japan's monetary policy, and yen-funded carry trades amid positive investor risk appetite (VIX fear gauge eased 1.52% to 12.29) as U.S. stocks rose Friday (S&P 500 hit record high 2,120.92 before closing up 0.23% at 2,117.69).
Technical comment:
The daily chart is negative-biased as the MACD is in bearish mode, stochastic turned bearish.
Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 119. A break of that target will move the pair further downwards to 118.70. The pivot point stands at 119.70. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 120.10 and the second target at 120.45.
Resistance levels:
120.10
120.45
120.85
Support levels:
119
118.70
117.35