USD/JPY is expected to trade in a lower range. Last Friday, US stocks dropped, weighed down by financial stocks. The Dow Jones Industrial Average declined 0.5% to 17,663, the S&P 500 dropped 0.5% to 2,079, and the Nasdaq Composite was down 0.4% to 5,053. Nymex crude oil ended up 1.2% at $46.59 a barrel, gold fell 0.3% to $1,142 an ounce, while the benchmark 10-year Treasury yield settled at 2.151%, down from 2.174% in the previous session. Meanwhile, the US dollar has turned weaker against most other major currencies giving up some gains made in previous sessions. NZD/USD surged 1.2% to 0.6771, GBP/USD rose 0.8% to 1.5428, EUR/USD gained 0.3% to 1.1005, USD/JPY dropped 0.5% to 120.61, while USD/CAD was down 0.7% to 1.3076.The pair is trading below the 20-period intraday moving average (MA), which is below the 50-period one. The intraday relative strength index (RSI) is badly directed within the area between 50 and 30 while being capped by a declining trend line. The intraday outlook remains bearish. As long as 120.80 holds as the key resistance, the pair is expected to fall to the first downside target at 120.15 (last seen on October 28) and the second one at 119.95 (last seen on October 22).
Trading recommendations:
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 120.15. A break of that target will move the pair further downwards to 119.90. The pivot point stands at 120.80. 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 121.20 and the second target at 121.50.
Resistance levels:121.20 121.50 121.90
Support levels: 120.15 119.90 119.45
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