USD/JPY is expected to trade with bullish bias. Overnight, US stocks dipped amid a sell-off in healthcare shares and International Business Machines' downbeat earnings report. The Dow Jones Industrial Average edging down 0.1% to 17,217, the S&P 500 was also down 0.1% to 2,030, while the Nasdaq Composite declined 0.5% to 4,880. Nymex crude oil fell 0.7% to $45.55 per barrel and gold was up 0.5% to $1,176 per ounce. The benchmark 10-year Treasury yield grew to 2.067% from 2.028% in the previous session. Meanwhile, the US dollar was broadly firm against most other major currencies. NZD/USD plunged to as low as 0.6732 after reaching the day-high at 0.6846. On the other hand, USD/CAD dropped to as low as 1.2930 from the day-high of 1.3049 after Justin Trudeau's Liberal Party secured a majority government in the latest national elections. The pair keeps trading on the upside after breaking above a triangle pattern. The 20-period intraday moving average (MA) remains above the 50-period one, while the intraday relative strength index (RSI) stands above the neutrality level of 50. The upside prevails and the pair is expected to proceed towards the first upside target at 120.15 (last seen on October 12).
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 120.15 and the second target at 120.35. In the alternative scenario, short positions are recommended with the first target at 119.20 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 119.55.
Resistance levels:120.15 120.35 120.75
Support levels: 119.20 118.90 118.60