USD/JPY is expected to trade in a higher range. US stocks advanced on Friday, led by shares in the consumer durable goods and apparel, food beverage and tobacco, as well as healthcare equipment and services sectors. The Dow Jones Industrial Average gained 0.4% to 17,215, the S&P 500 edged up 0.5% to 2,033, and Nasdaq Composite added 0.3% to 4,886. On the economic data front, the US industrial production declined 0.2% in September (vs -0.4% in August). Meanwhile, the University of Michigan consumer sentiment increased to 92.1 in October (vs 89.5 expected) from 87.2 in September, making the greenback strengthen against most other major currencies, including the euro and the yen. The pair keeps trading on the upside, though it has entered a consolidation phase after reaching as high as 119.65 last Friday. The intraday outlook remains bullish as the 20-period intraday moving average (MA) remains above the 50-period one, while the intraday relative strength index (RSI) is around the neutrality level of 50. As long as 118.90 holds as the key support, the pair is expected to retake the first upside target at 119.65.
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 119.65 and the second target at 119.90. In the alternative scenario, short positions are recommended with the first target at 118.60 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 118.25. The pivot point is at 118.90.
Resistance levels:119.65 119.90 120.25
Support levels: 118.60 118.25 117.75