FX.co ★ Technical analysis of USD/JPY for February 09, 2015

Fundamental overview:
USD/JPY is expected to trade in a higher range. It is supported by the positive dollar sentiment (ICE spot dollar index last 94.70 versus 93.59 early Friday) after larger than expected 257,000 increase in the US January non-farm payrolls (versus forecast +237,000) and 0.5% on-month increase in average hourly wage (versus forecast +0.3%). USD/JPY is also boosted by the higher US Treasury yields (10-year at 1.938% versus 1.815% late Thursday) as strong payrolls data heightened odds that the Fed will raise interest rates at its June meeting. The demand from Japan's importers and the ultra-loose Bank of Japan's monetary policy also favors the currency pair. But the USD/JPY gains are tempered by the Japanese exports, diminished investor risk appetite (VIX fear gauge rose 2.61% to 17.29; S&P 500 closed down 0.34% at 2,055.47 Friday) on prospect of tighter US monetary policy, lingering concerns about Greece and surprise 3.3% on-year drop in China's January exports (versus forecast for 4.0% increase) and larger than expected 19.9% on-year drop in China's January imports (versus forecast -3.3%).

Technical comment:
The daily chart is tilting positive as the MACD and stochastics are turning bullish.

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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 119.25 and the second target at 119.75. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 118. A break of this target would push the pair further downwards, and one may expect the second target at 117.65. The pivot point is at 118.45.

Resistance levels:
119.25
119.75
120.25
Support levels:
118
117.65
117.25