USD/JPY is expected to trade in a higher range. Overnight, the US stocks surged along with the European markets (over 2% gains in Germany and France) as European Central Bank President Mario Draghi hinted further stimulus measures. The Dow Jones Industrial Average rose 1.9% to 17489, the S&P 500 gained 1.7% to 2052, and the Nasdaq Composite advanced 1.7% to 4920. Nymex crude oil increased 0.4% to $45.38 per a barrel and gold was 0.1% down landing at $1,166 per a troy ounce. The benchmark 10-year Treasury yield eased further to 2.025% from 2.030% at the previous session. The pair continues to climb higher after its overnight surge. It is currently trading above the 20-period intraday moving average (MA), which stands above the 50-period. The intraday relative strength index (RSI) has moved above the overbought level of 70, while showing no bearish divergence. An intraday outlook is bullish. The first upside target is seen at 121.00, and a break above this level would open a path toward the second target at 121.30 (around the high of September 25).

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 121 and the second target at 121.30. In the alternative scenario, short positions are recommended with the first target at 119.55 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 119.20. The pivot point is at 120.10.

Resistance levels:121 121.30 121.75

Support levels: 119.55 119.20 118.90