USD/JPY is expected to trade with bearish bias. Overnight, US stocks advanced, lifted by energy and healthcare stocks. The Dow Jones Industrial Average rose 0.9% to 17,828, back in the positive territory since the start of the year. The S&P 500 gained 1.2% to 2,104, and the Nasdaq Composite was up 1.5% to 5,127. Nymex crude oil settled down 1.0% at $46.14 a barrel, gold fell 0.8% to $1,133 an ounce, while the benchmark 10-year Treasury yield rose to 2.185% from 2.151% in the previous session. Meanwhile, the US dollar held its ground against most other major currencies. USD/JPY edged up 0.1% to 120.75, while AUD/USD was also up 0.1% to 0.7143. Australia's central bank will announce its interest rate decision later on Tuesday (expected to hold at 2.00%). The pair has just broke above the previous key support and remains on the downside. It is currently supported by the rising 20-period intraday moving average (MA), which is above the 50-period one. And the intraday relative strength index (RSI) is well directed above the neutrality level at 50. The intraday outlook has turned bearish. As long as 120.90 holds as the key resistance, the pair is expected to decline to the first downside target at 120.15 (around the high of October 29) and the second one at 119.90 .
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 120.90. 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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