USD/JPY is expected to trade in a higher range. Overnight, US stocks kept pushing higher as energy shares gained on rallying oil prices. The Dow Jones Industrial Average gained 0.8% to 16,739, the S&P 500 rose 0.9% to 1,995, and the Nasdaq Composite climbed 0.6% to 4,889. Nymex crude oil surged 5.7% to $47.15 a barrel, gold was up 1.5% to $1,119 an ounce and the 10-year Treasury yield hiked further to 2.301% from 2.281%. Meanwhile, the US dollar edged lower against other major currencies as the US government reported that CPI edged down 0.1% MoM in August as expected. It was the first decline since January. GBP/USD surged 1.0% to 1.5492, AUD/USD gained 0.8% to 0.7195, while USD/CAD was down 0.6% to 1.3168. The pair posted a rebound from the level of 120.30 (current key support) overnight. It remains on the upside and is well supported by the ascending 50-period intraday moving average (MA). Meanwhile, the intraday relative strength indicator (RSI) is round the neutrality level of 50. Once the first upside target at 121 (around yesterday’s high) is reached, the pair is expected to proceed to the second upside target at 121.75 (around the high of September 11).
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 121.30 and the second target at 121.75. In the alternative scenario, short positions are recommended with the first target at 120. 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 119.35. The pivot point is at 120.35.
Resistance levels: 121.30 121.75 122.35
Support levels: 120 19.35 119.10
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