USD/JPY is expected to trade with bullish bias. US indices closed higher on Thursday led by shares in the Consumer Durables & Apparel, Energy and Media sectors. The Dow Jones Industrial Average added 138.46 points, or 0.8%, to 17,050.75. The S&P 500 rose 0.9%, and the Nasdaq Composite gained 0.4%. Nymex crude oil futures gained 3.4% to $49.43 a barrel, while gold prices fell 0.4% to $1144.70 an ounce. The yield on the 10-year Treasury note rose to 2.108%. On the economic data front, initial jobless claims decreased by 13,000 to a seasonally adjusted 263,000 in the week ended on October 3 (274K estimate). Continuing claims came in at 2204K for the week ended on September 26 from revised 2195K the week before. The greenback fell to a six-week low after the minutes of September's Federal Reserve meeting indicated the central bank wants to see higher inflation before raising interest rates. The pair stands above its horizontal support at 1.1230 and has been well supported by its rising 50-period intraday MA. The intraday RSI is above its 50% neutrality area and is well directed. Further upside is expected with the next horizontal resistance and overlap set at the 119.85 level (high of October 2) at first. A break above this level would call for further advance towards 120.65 in extension.

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 120.65 and the second target at 120.90. In the alternative scenario, short positions are recommended with the first target at 119.45 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 119.85.

Resistance levels:120.65 120.90 121.45

Support levels: 119.45 119.20 118.75