USD/JPY is expected to trade with a bearish bias as the key resistance is seen at 117.55. Last Friday, the US stock indices slid as the January jobs report came in weaker than the forecast ( 151K vs 185K expected, jobless rate down to an 8-year low of 4.9%, December number revised downward to 262K from 292K). Technology shares experienced a sell-off. The Dow Jones Industrial Average dropped 1.3% to 16204, the S&P 500 fell 1.9% to 1880, while the Nasdaq Composite slumped 3.3% to 4363.
Nymex crude oil declined further by 2.6% to $30.89 a barrel, while gold gained another 1.6% to $1173 an ounce. Amid strong demand for haven assets the benchmark 10-year Treasury yield fell to a 10-month low of 1.846% from 1.864% on Thursday.
Meanwhile, the US dollar rebounded against other most major currencies. EUR/USD dropped 0.5% to 1.1156 and GBP/USD declined 0.6% to 1.4500. At the same time, commodity-linked currencies gave back most of their gains made at the previous two sessions, with USD/CAD rising 1.2% to 1.3913, AUD/USD plunging 1.9% to 0.7062 and NZD/USD being down 1.4% to 0.6627.The pair has maintained a bearish bias after failing to advance further above the level of 117.55. Currently, it is capped by the key resistance at 117.55. The 20-period moving average has crossed below the 50-period one and the relative strength index is below the neutrality level of 50, signaling the persistence of the bearish bias. If the key resistance at 117.50 is not surpassed, the pair should fall toward the first downside target at 116.30.
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 116.30. A break of that target will move the pair further downwards to 116. The pivot point stands at 117.55. 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 117.80 and the second target at 118.25.
Resistance levels: 117.80, 118.25, 118.60
Support levels: 116.30, 116, 115.75