USD/JPY is expected to trade with a bullish bias. Overnight U.S. dollar edged down as investors are waiting for the monthly U.S. non-farm payroll report to be released Friday. The Dow Jones Industrial Average ended broadly flat at 17863, the S&P 500 declined 0.1% to 2099, and the Nasdaq Composite was down 0.3% at 5127. Nymex crude oil fell 2.4% to $45.20 a barrel, gold lost another 0.2% to $1,104 an ounce, while the benchmark 10-year Treasury yield rose to 2.245% from 2.232% in the previous session. The pair has been consolidating after touching 122.00 on the upside overnight. It is now seeking support from the rising 50-period intraday moving average (MA). Meanwhile the intraday relative strength index (RSI) is around the neutrality level at 50. As long as 121.35 holds as the key support, the consolidation's extent should be limited. If the pair finally breaks above 121.35, it should rise towards the second upside target at 122.45 (last seen on August 21).

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 122.45 and the second target at 123.00. In the alternative scenario, short positions are recommended with the first target at 121.10 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 120.90. The pivot point is at 121.35.

Resistance levels: 122.45 123 123.55

Support levels: 121.10 120.90 120.55