USD/JPY is expected to trade in a lower range. Overnight, US stocks rebounded after Tuesday's sharp declines. The Dow Jones Industrial Average climbed 1.8% to 16351, the S&P 500 also gained 1.8% to 1948, and the Nasdaq Composite rose 2.5% to 4749. Nymex crude oil traded with increased volatility and was up 1.9% to $46.25 a barrel, while gold slid 0.5% to $1133 an ounce and the 10-year Treasury yield stepped up to 2.193% from 2.174% on Tuesday. Meanwhile, the US dollar regained footing and strengthened broadly against other major currencies with EUR/USD dropping 0.8% to 1.1226 overnight, USD/JPY gaining 0.8% to 120.32 and USD/CHF rising 1.1% to 0.9685. Regarding USD/JPY, the pair is approaching the first upside target at 120.65, with support provided by the rising 20- and 50-period intraday moving averages (MAs). The intraday RSI is riding on a bullish trendline and placed within the buying area between 50 and 70.
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. As long as the price holds above its pivot point, long positions are recommended with the first target at 118.40 and the second target at 117.85. In the alternative scenario, short positions are recommended with the first target at 120.35 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 120.65. The pivot point is at 119.90.
Resistance levels: 120.35 120.65 120.95
Support levels: 118.40 117.85 117.25
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