USD/JPY is expected to trade with bearish bias.Overnight, the US stock indices closed higher with an end-of-session rally. Rising shares were noted in the semiconductor, food & staples retailing, and consumer services sectors. The Dow Jones Industrial Average gained 0.7% to 17251, the S&P 500 rose 0.8% to 2021, and the Nasdaq Composite was up 0.9% at 4968.

Nymex crude oil edged up 1 cent to settle at $34.74 a barrel, gold gained 1.2% to $1,078 an ounce, while the benchmark 10-year US Treasury yield declined to 2.196% from 2.215% last Friday.

The US dollar remained on the defensive as EUR/USD gained another 0.4% to 1.0912, AUD/USD climbed 0.3% to 0.7187, and NZD/USD was up 0.5% to 0.6757. Meanwhile, the dollar stayed weak against the yen with USD/JPY at 121.15, and strong against the Canadian dollar with USD/CAD at 1.3957. The pair posted a rebound after dipping as low as 120.82 overnight. However, the pair remains under pressure while being capped by the 50-period (30-minute chart) moving average. The 20-period moving average has crossed below the 50-period one. The rebound is losing momentum, and once it ends, the pair is expected to decline toward the first downside target at 120.85 (a price base seen on December 15) and the second one at 120.55 (the low of December 15). Only a break above the key resistance at 121.75 would turn the intraday outlook bullish.

Trading recommendations:

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 120.50. A break of that target will move the pair further downwards to 120.15. The pivot point stands at 121.50 . 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 121.75 and the second target at 122.15.

Resistance levels: 121.75 122.15 122.55

Support levels: 120.50 120.15 119.65