USD/JPY is expected to trade with a bullish bias. Overnight, the US stock indexes ended lower, dragged by a broad selloff in energy shares triggered by oil prices' continuous slide. The Dow Jones Industrial Average fell 0.7% to 17730, the S&P 500 lost 0.7% to 2077, and the Nasdaq Composite was down by 0.8% to 5101. Nymex crude oil plunged 5.8% to $37.65 a barrel to near seven-year lows.

Gold lost 1.5% to $1070 an ounce and the benchmark 10-year Treasury edged down to 2.236% from 2.274% in the previous session.

The US dollar managed to hold its gains against most other major currencies. Boosted by a clump in oil prices, USD/CAD surged 1.0% to 1.3504. EUR/USD was down by 0.5% landing at 1.0835, NZD/USD lost 1.6% to 0.6638, while AUD/USD was down by 1.0% to 0.7265. The pair remains on the upside and is currently trading around the over-lapping 20-period (30-minute chart) and 50-period intraday moving averages. Meanwhile, the relative strength index is hovering around the neutrality level of 50. As long as the bullish intraday outlook is maintained and 122.90 acts as key support, the pair is expected to break out the first upside target at 123.55 (around the high of December 3).

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 123.50 and the second target at 123.75. In the alternative scenario, short positions are recommended with the first target at 122.75 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 122.50. The pivot point is at 122.90.

Resistance levels: 123.50 123.75 124

Support levels: 122.70 122.50 122.25