USD/JPY is under pressure.Overnight U.S. stock indexes rebounded over 1%, boosted by shares in the retailing, technology hardware & equipment and pharmaceutical sectors. The Dow Jones Industrial Average rose 1.1% to 17720, the S&P 500 also climbed 1.1% to 2078, while the Nasdaq Composite was up 1.3% to 5107.

Nymex crude oil rebounded 2.9% to settle at $37.87 a barrel, gold remained broadly flat at $1068 an ounce. The benchmark 10-year Treasury yield increased to 2.310% from 2.227% in the previous session.

Meanwhile the U.S. consumer confidence index rose to 96.5 in December (vs 93.5 expected) from 92.6 in November. At the same time the U.S. dollar regained strength against most other major currencies. EUR/USD declined 0.4% to 1.0917, GBP/USD fell 0.4% to 1.4811 (an 8-month low), while USD/CAD lost 0.5% to 1.3840 and AUD/USD was up 0.7% to 0.7294. The pair keeps trading below the key resistance at 120.75 (a price base seen in December 22-23), though intraday technical signals (20- and 50-period moving average on a 30-minute chart, relative strength index) are mixed showing no upward or downward momentum. As long as the key resistance at 120.75 is not surpassed, the pair stands a higher chance of maintaining a bearish intraday outlook and declining toward the first downside target at 120.00 (the low of December 25).

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 120.20. A break of that target will move the pair further downwards to 120.00. The pivot point stands at 120.75. 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 121 and the second target at 121.30.

Resistance levels: 121.00, 121.30, 121.75

Support levels: 120.20, 120.00, 119.75