USD/JPY is still under pressure. Last Friday, the US. stocks fell sharply for the second straight day dragged by weakness in financial, technology, and transportation shares. The Dow Jones Industrial Average dropped 2.1% to 17128, the S&P 500 lost another 1.8% to 2005, and the Nasdaq Composite was down by 1.6% to 4923. Meanwhile, the US government bonds strengthened as lower stock prices boosted demand for safe-haven assets. The benchmark for 10-year Treasury yield declined to 2.215% from 2.236% at the previous session.

Nymex crude continued its downward journey giving up another 0.6% to settle at $34.73 a barrel, while gold closed by 1.5% up at $1,065 an ounce.

The US dollar retreated to give back a part of previous sessions' gains, with the Wall Street Journal Dollar Index edging down 0.5% at 90.28. EUR/USD gained 0.4% to 1.0865, USD/JPY plunged 1.1% to 121.20, and AUD/USD was up 0.6% to 0.7169. On the other hand, USD/CAD traded as high as 1.4002 during the day before moving up by 0.1% to 1.3953. The pair accelerated to the downside after breaking below the previous key support of 122. It is currently being capped by the descending 20-period (30-minute chart) moving average, which stands below the 50-period one. The intraday relative strength index stays below the neutrality level of 50 lacking upward momentum. As long as the bearish intraday outlook persists, the pair should decline toward the first downside target at 120.85 (a price base seen on December 15) and second one at 120.55 (the low of December 15).

Trading recommendations:

he 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 120.85. A break of that target will move the pair further downwards to 120.50. The pivot point stands at 121.90 . 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 122.25 and the second target at 122.60.

Resistance levels: 122.25 122.60 123.20

Support levels: 120.85 120.50 120