USD/JPY is expected to trade with a bullish bias. The US stocks rose sharply on Monday as investors bet that low interest rates would stick around for longer. The S&P 500 gained 35.69 points, or 1.8%, to 1987.05. The Dow Jones Industrial Average rose 304.06 points, or 1.8%, to 16776.43, and the Nasdaq Composite advanced 73.49 points, or 1.6%, to 4781.26. Crude prices rose 1.6% to $46.26 in New York. And gold prices added 0.1% to $1,138.10 an ounce. The yield on the 10-year U.S. Treasury rose to 2.058% from 1.989% on Friday. Market US composite PMI was at 55 in Sept from 55.3 in Aug. The US services PMI was at 55.1 from 55.6. The US non-manufacturing ISM lowered to 56.9 in Sept from 59 in Aug. The US dollar remained unchanged, while USD/JPY was up 0.4% at 120.42. The pair is well supported by its rising 20-period intraday MA, which stays above its 50-period one. The intraday RSI is above 50 and is positively oriented. Further upside movement is therefore expected with the next horizontal resistance and overlap set at 120.65 at first. A break above this level would call for further advance towards 120.90.

Trading recommendations:

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 120.65 and the second target at 120.95. In the alternative scenario, short positions are recommended with the first target at 119.80 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 119.45. The pivot point is at 120.

Resistance levels: 120.65 120.95 121.30

Support levels: 119.80 119.45 119.20