Upside movements are expected to prevail in the USD/JPY pair. Overnight, US stocks settled higher despite a continuous slump in oil prices. Technology and health-care shares were the best performers. The Dow Jones Industrial Average rose 0.7% to 16,516, the S&P 500 gained 0.8% to 1,938, while the Nasdaq Composite was up 1.0% to 4,685.

Nymex crude oil, which had once sank below $30.00 a barrel, plunged another 3.1% to $30.44 a barrel, gold dropped 0.7% to $1,086 an ounce, while the benchmark 10-year Treasury yield declined to 2.100% from 2.160% in the previous session.

The US dollar stays firm with EUR/USD being broadly flat at 1.0857, USD/CHF closing again above the 1.0000 level, and USD/CAD gaining another 0.3% to 1.4260. Dragged by a downbeat British industrial output report, GBP/USD plunged to a 5.5-year low at 1.4351 before closing 0.7% lower at 1.4443. Having undergone yesterday's choppy session, the pair has managed to stay on the upside. Currently, it is trading above the over-lapping 20- and 50-period moving averages and is around the upper Bollinger band. Besides, the relative strength index is rising, calling for a new up-leg. As long as 117.60 holds as the key support, the pair should proceed towards the first upside target at 118.80 (around the high of January 11).

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, it is recommended to open long positions with the first target at 118.80 and the second target at 119.30. In the alternative scenario, it is recommended to open short positions with the first target at 116.75, 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 116.10. The pivot point is at 117.60.

Resistance levels: 118.80, 119.30, 119.75

Support levels: 117.20, 116.75, 116.10