USD/JPY is expected to trade with a bullish bias. The US Dollar Index is currently trading at 97.372, while overnight it reached a weekly high of 97.773 after the US government reported that the annualized GDP rose 2.3% in Q2 compared to an upwardly revised 0.6% advance in Q1. USD/JPY is consolidating after rising to a 7-week high of 124.58 overnight. The pair keeps trading above the key support at 123.80, while intraday indicators (20- and 50-period intraday moving averages and intraday RSI) are mixed. Even though a continuation of the consolidation cannot be ruled out, its extent should be limited. As long as 123.80 holds as the key support, the bias remains bullish with upside targets at 124.60 and 124.80. However, a break below the key support would trigger a decline toward 123.50 and 123.30 (the low of July 29).

Technical comment:

The daily chart is bullish as the MACD is in bullish mode.

Trading recommendations:

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 124.60 and the second target at 124.85. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 123.50. A break of this target would push the pair further downwards, and one may expect the second target at 123.30. The pivot point is at 123.90.

Resistance levels: 124.60 124.85 125.50

Support levels: 123.50 123.30 122.85