USD/JPY is expected to trade in a lower range. The US indices closed mixed on Monday. Shares in the Energy ( 2.36%), Materials ( 1.17%) and Pharmaceuticals, and Biotechnology & Life Sciences ( 1.1%) sectors traded higher, while shares in the Software & Services (-1.29%), Consumer Durables & Apparel (-1.22%), and Food, Beverage & Tobacco (-0.84%) sectors were under pressure. The Dow Jones Industrial Average added 0.4% to 17073.95, the S&P 500 rose 0.1% to 2001.76, and the Nasdaq Composite dropped 0.2% to 4708.25.
Nymex crude oil was up $1.98 to $37.9 a barrel, while gold dropped 0.5% to $1263.2 an ounce. The yield on the 10-year Treasury notes rose to 1.902% from 1.883%.
The US dollar was bearish against most of its counterparts on Monday with the exception of the CHF and the NZD. On the economic data front, labor market conditions fell to -2.4 in February (estimated 1.0) after a 0.8 fall in January. In other news, consumer borrowing rose in January by the least since November 2013 to $10.5 B (estimated $17.0 B) in total credit following a revised $21.4 B gain in the previous month.
The euro was bearish against its major rivals with the exception of the NZD and the CHF. In Europe, the German factory orders dropped 0.1% in January from the prior month, when they slid by 0.2%.
The Australian dollar was bullish against its major rivals. The pair is currently testing its resistance base at 113.50, which has opened doors for a temporary stabilization. As long as 113.50 holds as the key resistance, further downside is expected with the next horizontal resistance and overlap set at 112.50 at first. A breakout below this level would call for further advance toward 112.10.
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 112.50. A break of this target will move the pair further downwards to 112.10. The pivot point stands at 113.50. 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 114.25 and the second target at 114.55.
Resistance levels: 114.25, 114.55, 114.85
Support levels: 112.50, 112.10, 111.75