USD/JPY is turning down. Overnight U.S. stocks closed broadly flat as investors await the Federal Reserve's interest rate decision this Wednesday. The Dow Jones Industrial Average edged up 0.1% to 17229, the S&P 500 edged down 0.1% to 2019, and the Nasdaq Composite was up less than 0.1% to 4750. Stock-trading volume of 6.3B shares hit the lowest level of the year.
Nymex crude oil reversed course to drop 3.4% to $37.18 a barrel, gold lost another 1.1% to $1235 an ounce, while the benchmark 10-year Treasury yield eased to 1.963% from 1.977% in the previous session.
On the forex front, the U.S. dollar strengthened against most other major currencies, with EUR/USD falling 0.4% to 1.1104, GBP/USD losing 0.6% to 1.4300, and NZD/USD plunging 1.2% to 0.6670. Meanwhile, the Canadian dollar softened on weaker oil prices, with USD/CAD rebounding 0.4% to 1.3258. The pair retraced back yesterday, and also broke below its 50-period moving average support, which should confirm an intraday bearish reversal. The 20-period moving average also turned down, and crossed below the 50-period one. Furthermore, the relative strength index is badly directed, calling for a new pullback. To sum up, as long as 114.15 is not surpassed, the pair is likely to decline to 113.10 and 112.70 in extension.
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 113.10. A break of this target will move the pair further downwards to 112.70. The pivot point stands at 114.15. 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 114.55 and the second target at 115.
Resistance levels: 114.55, 114, 115.
Support levels: 113.10, 112.70, 112.20