USD/JPY is Under pressure. The pair pulled back last Friday, and is now testing its nearest support at 114.00. The risk of a slide below this level remains high, as the relative strength index is badly directed, without showing any reversal signals.

The U.S. dollar showed some signs of rebounding energy upon the release of economic data. However, the upward momentum proved unsustainable. The ICE U.S. Dollar Index finally ended at 101.18 (day-high at 101.67), down 0.2% on day and extending its losing streak to a third session.

In which case, as long as 114.80 holds on the upside, further decline seems to be on the cards toward 113.75 (Jan 12 low).

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 113.75. A break below this target will move the pair further downwards to 113.40. The pivot point stands at 114.65. 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 115.20 and the second one at 115.65.

Resistance levels: 115.20, 156.65, 116.05

Support levels: 113.75, 113.40, 113.00