USD/JPY is expected to trade in a lower range. Overnight, the US stocks ended lower as pressure on oil prices resumed. The Dow Jones Industrial Average fell 1.3% to 15885, the S&P 500 dropped 1.6% to 1877, while the Nasdaq Composite was down 1.6% to 4518.

Nymex crude oil, which had soared 9% last Friday, gave back 5.7% to settle at $30.34 a barrel. Gold gained 1.0% to $1108 an ounce, while the benchmark 10-year Treasury yield moved down to 2.022% from 2.052% in the previous session.

Meanwhile, as oil prices weakened, the Canadian dollar erased its earlier gains against the US dollar, with USD/CAD surging 1.2% to 1.4289. At the same time, EUR/USD rose 0.5% to 1.0847, USD/JPY declined 0.4% to 118.28, and AUD/USD was down 0.7% to 0.6954.

The pair has broken below a bullish trend line remaining on the downside. Currently, it is trading below the 20-period (30-minute chart) moving average, which stands below the 50-period one. Meanwhile, the intraday relative strength index remains below the neutrality level of 50 after breaking below a rising trend line. Therefore, the intraday outlook has turned bearish and the pair should decline toward the first downside target at 117.50 (a level of over-lapping support and resistance) and the second target at 117.10.

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 117.50. A break of that target will move the pair further downwards to 117.10. The pivot point stands at 118.50. 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 119.20 and the second target at 119.60

Resistance levels: 119.20, 119.60, 119.90

Support levels: 117.50,117.10,116.75