USD/JPY is expected to trade in a higher range. Currently trading at 97.764, the US Dollar Index is mixed trading. The ISM Services Sector Index rose to 60.3 in July, which is the highest level since August 2005, from 56.0 in June. The ADP National Employment Report showed that US private employers added 185,000 jobs in July (vs +215,000 expected, +229,000 in June). The US government reported that the country’s trade deficit amounted to $43.84 billions in July (vs $43.00 billion deficit expected, $40.94 billion deficit in June). While having come off from its overnight high of 125.01, a level last seen in early June, USD/JPY keeps trading on the upside (now at 124.81) and around the 20-period intraday moving average (now at 124.83), which remains above the period 50. The intraday RSI is within the buying area between 50 and 70. The first upside target is set at the horizontal level of 125.25 and the second is seen at 125.60.
The daily chart is positive-biased as stochastics is bullish, the MACD histogram bars are turned positive. Five-day moving average is rising above 15-day moving average.
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
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