USD/JPY pair is under presure and expected to trade with a bearish bias . US stocks dropped last Friday as August's jobs report failed to reduce uncertainties concerning the Federal Reserve's next interest rate hike. Nonfarm payrolls rose 173K against 220K that had been expected, while the unemployment rate fell to 5.1% (vs 5.2% expected) from 5.3% in July. The Dow Jones Industrial Average dropped 1.7% to 16102.38, the S&P 500 fell 1.5% to 1921 and the Nasdaq Composite was 1.1% down and reached 4683. Meanwhile, Nymex crude moved 1.5% down to $46.05 a barrel, gold slid 0.2% to $1122, and the 10-year Treasury yield fell further to 2.128% from 2.170% a day earlier. The US dollar was mixed against other major currencies. It fell against the euro (EUR/USD +0.3% to 1.1153) and yen (USD/JPY -0.9% to 119.01), but strengthened against the Canadian dollar (USD/CAD +0.8% to 1.3282), Australian dollar (AUD/USD -1.5% to 0.6912, the lowest level since March 2009), New Zealand dollar (NZD/USD -1.8% to 0.6284), and even the British pound (GBP/USD -0.6% to 1.5169). The pair is showing choppy price actions with a bearish bias, which is maintained by the declining 20- and 50-period intraday moving averages (MAs). Also the intraday RSI is badly directed within the selling area between 50 and 30. The first downside target is seen at 118.55 (around last Friday's low), and the second one is set at 117.80 (last seen on August 24).
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 118.50 and the second target at 117.85. In the alternative scenario, short positions are recommended with the first target at 120.25 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 119.70.
Resistance levels: 120.20 120.65 120.95
Support levels: 118.5 117.85 117.25
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