USD/JPY is expected to rebound. Last Friday, U.S. stocks extended a sell-off sparked by worries about global growth and chalked on the largest one-day loss in two weeks. The Dow Jones Industrial Average dropped 1.7% to 16384, the S&P 500 fell 1.6% to 1958, and the Nasdaq Composite declined 1.4% to 4827. Nymex crude oil plunged 4.7% to $44.68 a barrel, while gold surged 1.9% to $1,138 an ounce. The 10-year Treasury yield sank to 2.130% from 2.215% in the previous session. Along with the bounce in the US Treasury bonds, the greenback posted a strong rebound against most other major currencies. EUR/USD dropped 1.1% to 1.1305, GBP/USD fell 0.4% to 1.5531, USD/CHF rose 1.0% to 0.9683, and USD/CAD rebounded from a day-low of 1.3007 to 1.3229.The pair is posting a rebound from last Friday's intraday low of 119.01. The intraday 20-period intraday moving average (MA) has crossed above the 50-period one, while the intraday relative strength indicator (RSI) is around the neutrality level at 50. As long as 119.65 holds as the key support, the pair is expected to extended its rebound to the first upside target at 120.75 (around the high of September 18). The second one is set at 121.
Trading recommendations:
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 120.75 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: 120.75 121 121.50
Support levels: 119.35 118.90 118.20
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