USD/JPY is expected to trade in a lower range. Last Friday, the US stocks lost another 2% in a broad-based selloff as oil prices nose-dived. Nymex crude oil plummeted 5.7% to $29.42 a barrel, the lowest level since November 2003. The Dow Jones Industrial Average dropped another 2.4% to 15988, the S&P 500 declined 2.3% to 1876, while the Nasdaq Composite was down 2.7% to 4488.

Gold gained 1.0% to $1088 an ounce, while the benchmark 10-year Treasury yield eased further to 2.035% from 2.100% on Thursday.

Meanwhile, commodity-linked currencies continued to be weighed on by diving oil prices. USD/CAD surged as high as 1.4555, which was last seen only in April 2003, before settling up 1.2% at 1.4538. Also AUD/USD plunged 1.7% to 0.6867. At the same time, GBP/USD lost 1.1% to 1.4254. On the other hand, EUR/USD rose 0.5% to 1.0914 and USD/JPY fell 0.8% to 117.05. The pair traced the lower Bollinger band and sank as low as 116.48 before posting a rebound last Friday. Currently, it is trading around the 20-period (30-minute chart) moving average, which is below the 50-period one. And the intraday relative strength index remains below the neutrality level of 50. If the rebound ends below the key resistance at 117.50, the pair should return to the first downside target at 116.50.

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 116.80. A break of that target will move the pair further downwards to 116.50. The pivot point stands at 117.50. 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 117.90 and the second target at 118.35.

Resistance levels: 117.90, 118.35, 118.60

Support levels: 116.80, 116.50, 116