USD/JPY is expected to trade with bullish bias. With the US dollar index traded at 97.712, the greenback has failed to hold its gains made immediately after the US government reported last Friday that non-farm sector added 215K jobs in July (vs 225K expected, 223K in June). Even though the robust number suggests that the Federal Reserve could raise interest rates this year, traders expect rate increases to be slow, and the US dollar's upside is limited. USD/JPY broke above its previous key support at 124.45 and remains upside. The 20-period intraday moving average is below the 50-period one, while the intraday RSI stays within the selling area between 50 and 30. So, even though a continuation of a technical rebound cannot be ruled out, its extent should be limited. The key resistance is set at 124.45 and the first upside target at 125.25 (around last Friday's low). The second downside target is set at further support at 125.60.
The daily chart is positive-biased as stochastics is bullish, the MACD histogram bars are turned positive.
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 keeps above its pivot point, long positions are recommended with the first target at 125.25 and the second target at 125.60. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 124.30. A break of this target would push the pair further downwards, and one may expect the second target at 124.10. The pivot point is at 124.45.
Resistance levels: 125.25 125.60 126
Support levels: 124.30 124.10 123.70