FX.co ★ Technical analysis of USD/JPY for Feburary 24, 2014

Overview:

USD/JPY is expected to consolidate after hitting the three-week high of 102.83 on Friday. It is undermined by the weaker dollar sentiment (ICE spot dollar index last 80.25 versus 80.28 early Friday) and selling of yen crosses amid the diminished investors' risk appetite (S&P fell 0.19% Friday) after larger-than-expected 5.1% on-month fall in the U.S. existing home sales to 4.62 million in January (versus 4.7 million forecast). USD/JPY is also weighed by the lower U.S. Treasury yields and Japan's export sales. But USD/JPY is limited to the downside by the demand among the Japan's importers and the expansionary monetary policy of the Bank of Japan. Little FX reaction after the Group of 20 officials ended their summit this weekend saying they would take actions to boost the world economy by more than $2 trillion.

Technical сomment:
Daily chart still is positive-biased as the MACD and stochastics are in the bullish mode.

Trading recommendation:

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, a long position is recommended with the first target at 103.05 and the second target at 103.40. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102. A breach of this target will push the pair further downwards and one may expect the second target at 101.65. The pivot point is at 102.7.

Resistance levels:
103.05
103.40
103.85

Support levels:
102
101.65
101.35