FX.co ★ Technical analysis of USD/JPY for August 24, 2016

USD/JPY is expected to trade with a bearish bias as key resistance is at 100.65. Despite the recent technical rebounds, the pair remains under pressure below its key resistance at 100.65. The relative strength index lacks strong upward momentum, calling for caution. On the economic front, the U.S. Commerce Department reported that new home sales jumped 12.4% on month to a seasonally adjusted annual rate of 654,000 units in July (vs. -2.0% on month to 580,000 units expected).

As long as 100.65 holds on the upside, the pair is likely to pull back to challenge its nearest support at 100.00. A break below this level would open the way to further weaknesses toward 99.70.

Trading Recommendation:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 99.90. A break below this target will move the pair further downwards to 99.60. The pivot point stands at 100.65. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 100.90 and the second one at 101.20.

Resistance levels: 100.90, 101.20, 101.75

Support levels: 100.00, 99.70, 98.95