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Technical analysis of USD/JPY for November 10, 2015

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SD/JPY is expected to trade in a higher range as the bias remains bullish. Overnight, the US stock indices fell as financial, energy, and consumer discretionary shares came under pressure. The Dow Jones Industrial Average dropped 1.0% to 17730 entering the negative territory, the S&P 500 declined 1.0% to 2078, and the Nasdaq Composite was also 1.0% down to 5095. Nymex crude fell 0.9% to $43.87 a barrel, gold edged up 0.3% to $1091 a troy ounce. The benchmark 10-year Treasury yield climbed further to 2.343% from 2.332% at the previous session.

Meanwhile the U.S. dollar entered a consolidation after last Friday's surge. Overnight, the pair challenged the first upside target (123.60) by running up to 123.59 (last seen on August 20) before entering a consolidation. It is currently trading below the 20-period intraday moving average (MA), which has crossed below the 50-period one. While the consolidation may last for a while, its extent should be limited as long as 122.65 holds as the key support. Should the pair break above 123.60, it could rise further to 124.00 (also last seen on August 20).

Trading recommendations:

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 123.60 and the second target at 124. In the alternative scenario, short positions are recommended with the first target at 122 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 121.60. The pivot point is at 122.65.

Resistance levels: 123.60 124 124.75

Support levels: 122 121.60 122.35



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