USD/JPY is expected to trade with a bullish bias. US stocks slid further, dragged by materials and energy shares. The Dow Jones Industrial Average fell 0.3% to 16279, the S&P 500 declined 0.2% to 1938, while the Nasdaq Composite dipped 0.1% to 4752. Nymex crude plunged 4.1% to $44.48 a barrel, while gold rose 0.5% to $1130 an ounce. The 10-year Treasury yield edged up to 2.144% from 2.127% at the previous session. Meanwhile the US dollar was broadly firm against most other major currencies. The pair is trading on the upside, while being supported by the 50-period intraday moving average (MA). The intraday relative strength indicator (RSI) stands above the neutrality level of 50 lacking downward momentum. The pair maintains a bullish bias and is expected to approach the first upside target at 120.55 (yesterday’s high) and the second one at 121.00 (the high of September 17).
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 120.55 and the second target at 121. In the alternative scenario, short positions are recommended with the first target at 119.35 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 118.90. The pivot point is at 119.65.
Resistance levels: 120.55 121 121.50
Support levels: 119.35 118.90 118.20
The material has been provided by InstaForex Company – www.instaforex.com