The USD/JPY pair is under pressure now. Overnight, the US stocks closed slightly lower after a choppy session. Energy shares declined and oil prices plunged again, while materials and health-care shares were the best performers. The Dow Jones Industrial Average edged down 0.1% to 16014, the S&P 500 also slipped 0.1% to 1852, while the Nasdaq Composite was down 0.4% to 4268.
Nymex crude oil slumped 5.9% to $27.94 a barrel, gold declined 0.2% to $1189 an ounce, while the benchmark 10-year Treasury yield fell further to a 1-year low of 1.728% from 1.736% in the previous session.
Meanwhile, the US dollar weakened further as investors jumped to other haven assets. USD/CHF plunged 1.4% to 0.9724, EUR/USD rose 0.9% to 1.1291, and USD/JPY lost another 0.6% to 115.10.
The pair is forming a triangle bearish continuation pattern with the first downside target at 114.20 (yesterday's low). A bearish bias is maintained by the descending 20- and 50-period (30-minute chart) moving averages. A breakout below 114.20 is likely to trigger a further decline toward 113.55.
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 114.20. A break of that target will move the pair further downwards to 113.55. The pivot point stands at 115.30. 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 115.85 and the second target at 116.50.
Resistance levels: 115.85, 116.50, 117.00
Support levels: 114.20, 113.55, 113