USD/JPY is expected to continue its bullish bias. US indices closed higher on Wednesday led by shares in the Energy ( 1.54%), Software & Services ( 1.32%) and Food, Beverage & Tobacco ( 0.93%) sectors. The Dow Jones Industrial Average rose 0.2% to 17000.4, the S&P 500 gained 0.5% to 1989.3, and the Nasdaq Composite advanced 0.6% to 4674.4.
Nymex crude oil was up 4.9% to $38.3 a barrel, while gold fell 0.4% to $1257.4 an ounce. The yield on the 10-year Treasury note rose to 1.892% from 1.832% previously.
The US dollar was bearish against most of its counterparts on Wednesday with the exception of the JPY. On the economic data front, MBA mortgage applications index rose 0.2% in week ended March 4th after falling 4.8% in prior week. In other news, Jan. wholesale inventories increased by 0.3% to $584.2B (estimated fall of 0.2%) vs. $582.6B in prior month revised to 0.0% from -0.1%.
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. Therefore, long positions are recommended with the first target at 114.25 and the second one at 114.50. In the alternative scenario, short positions are recommended with the first target at 112.70 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 112.20. The pivot point is at 113.
Resistance levels: 114.25, 114.50, 114.85
Support levels: 112.70, 112.20, 111.85