USD/JPY is expected to trade with a berish bias. Overnight, US stocks advanced, with the Dow Jones Industrial Average gaining 0.5% to close at 16330, the S&P 500 also rising 0.5% to 1952, and the Nasdaq Composite adding 0.8% to 4796. Nymex crude surged 4.0% to $45.92 a barrel, gold was 0.7% up to $1109 an ounce, while the 10-year Treasury yield climbed to 2.222% from 2.179% on Wednesday. Meanwhile, the US dollar weakened broadly against other major currencies. The British pound surged as the Bank of England kept its benchmark interest rate unchanged at 0.5%, and the latest meeting minutes revealed that monetary policy makers view the economy's prospects as positive, hinting an interest rate hike next year is on track. The pair keeps trading on the upside and is above both the 20- and 50-period intraday moving averages (MAs). The intraday relative strength indicator (RSI) stays in the buying area between 50 and 70, lacking downward momentum. As long as 121.20 holds as the key resistace, the pair is expected to approach the first downsideside target at 119.90.
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 119.90. A break of that target will move the pair further downwards to 119.60. The pivot point stands at 121.20. In case 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 121.70 and the second target at 122.
Resistance levels: 121.70 122 122.50
Support levels: 119.90 119.60 119.20
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