USD/JPY is expected to rebound. Last Friday, the US stocks surged on strong November jobs data, paring losses made in the previous session. The Dow Jones Industrial Average rose 2.1% to 17847, the S&P 500 added 2.1% to 2091, and the Nasdaq Composite was also up 2.1% to 5142. Non-farm payrolls rose 211K in November (vs 200K expected, 298K in October), while the jobless rate remained unchanged at 5.0% (as expected).
At the same time, the US dollar broadly strengthened against most other major currencies with the Wall Street Journal Dollar Index gaining 0.4% to 89.76. EUR/USD declined 0.5% to 1.0884 and USD/JPY gained 0.5% to 123.16.
Nymex crude oil dropped 2.7% to $39.97 a barrel after the OPEC had decided to maintain current production levels. On the other hand, gold surged 2.3% to $1086 an ounce. Meanwhile, the benchmark 10-year Treasury declined to 2.274% from 2.328% at the previous session. The pair posted a rebound after falling to 122.44 last Friday. Currently, it remains on the upside while being supported by the ascending 20-period intraday (30-minute chart) moving average, which stands above the 50-period one. At the same time, the relative strength index is well directed above the neutrality level of 50. The first upside target at 123.60 (around last Friday's high) is in sight, and a breakout above this level should trigger a further rise toward 123.85 (around the high of December 3).
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 123.60 and the second target at 123.85. In the alternative scenario, short positions are recommended with the first target at 122.75 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 122.50. The pivot point is at 123.05.
Resistance levels: 123.60 123.85 124
Support levels: 122.75 122.50 122.25