USD/JPY is expected to trade with a bullish bias above 117.75. The pair has bounced up from another test of support at 117.50 and broke above its 20-period moving average. The relative strength index is around its neutrality level at 50 and lacks downward momentum. A support base at 117.75 has formed and should limit the downside potential. As long as 117.75 holds on the downside, look for a further upside toward 118.35. A break above 118.35 would call for a further advance toward 118.60.

Recommendation:

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 118.35 and the second one, at 118.60. In the alternative scenario, short positions are recommended with the first target at 117.50 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 117.25. The pivot point is at 117.75.

Resistance levels: 118.35, 118.60, 119

Support levels: 117.50, 117.25, 116.90