FX.co ★ Technical analysis of USD/JPY for April 29, 2016

USD/JPY is under pressure. Overnight, US stock indices ended markedly lower, dragged by declining technology stocks as well as the impact on investor sentiment caused by the Bank of Japan's decision not to expand monetary stimulus. Apple Inc's (APPL) lost another 3% after billionaire investor Carl Icahn said he had sold out his position in the stock on China concerns. The Dow Jones Industrial Average dropped 1.2% to 17830, the S&P 500 fell 0.9% to 2075, and the Nasdaq Composite lost 1.2% to close at 4805.

Nymex crude oil gained another 1.5% to $46.03 a barrel, gold surged 1.6% to $1266 an ounce, and the benchmark 10-year Treasury yield declined further to 1.837% from 1.861% in the previous session.

The Japanese yen surged against the US dollar yesterday as the Bank of Japan surprised the market by keeping interest rates and monetary easing measures unchanged. USD/JPY plunged 3.0% to 108.08.

The greenback also weakened against other major currencies, with EUR/USD rising 0.3% to 1.1351, GBP/USD gaining 0.5% to 1.4608, AUD/USD rebounding 0.6% to 0.7625, and NZD/USD surging 1.8% to 0.6956.

The pair has failed to post a sustainable rebound after yesterday's 3% drop. Currently, it remains capped by the descending 20-period (30-minute chart) moving average. The intraday relative strength index has broken below the oversold level of 30 lacking upward momentum. Below 108.75, look for a further decline toward the next support at 106.40 .

Trading Recommendation:

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 106.40. A break of this target will move the pair further downwards to 105.80. The pivot point stands at 108.75. 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 109.90 and the second target at 110.65.

Resistance levels: 109.90, 110.65, 111.10

Support levels: 106.40, 105.80, 105.45