USD/JPY is rebounding upward. US stocks tumbled overnight, dragged by global growth fears reignited by the weak Chinese data and a sell-off in biotech and health care stocks. The Dow Jones Industrial Average dropped 1.9% to 16,001, the S&P 500 fell 2.6% to 1,881, and the Nasdaq Composite plunged 3.0% to 4,543. Nymex crude oil lost 2.7% to $44.45 a barrel and gold slid 1.2% to $1,132 an ounce. The 10-year Treasury yield declined to 2.093%, the lowest level since August 24, from 2.167% in the previous session. Meanwhile, the US dollar was firm against commodity currencies amid falling commodity prices. It is trading above the descending 20- and 50-period intraday moving averages (MAs). The intraday relative strength indicator (RSI) remains within the selling area between 50 and 30, lacking upward momentum. Meanwhile, the first upside target at 120.35 is in sight. A break of this support would trigger a further upward movement towards the second upside target at 120.65 (the low of September 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 120.35 and the second target at 120.65. In the alternative scenario, short positions are recommended with the first target at 119 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 118.70. The pivot point is at 119.25.
Resistance levels: 120.35 120.65 120.95
Support levels: 119 118.70 118.45
The material has been provided by InstaForex Company – www.instaforex.com