USD/JPY is turning upwards. US stock markets were closed Monday for the Martin Luther King holiday.

Oil prices continued their slump with the West Texas Intermediate futures trading down 1.6% at $28.94 a barrel, and the Brent crude futures, which once touched a nearly 13-year low at $27.67 a barrel, falling 1.4% to $28.55 a barrel.

Meanwhile, the US dollar remained firm against most other major currencies. The pair has just broken above the key resistance at 117.20 turning the intraday outlook to bullish. Currently, it is trading around the upper Bollinger band as those bands are widening. At the same time, the 20-period (30-minute chart) moving average stays above the 50-period one, and the intraday relative strength index is well directed within the buying area between 50 and 70. The bullish intraday outlook is therefore expected to persist. The first upside target is set at 118.35 (level of overlapping resistance and support); and the second one, at 118.75 (around the high of January 13).

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 118.35. A break of that target will move the pair further downwards to 118.75. The pivot point stands at 117.20. 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 116.80 and the second target at 116.50.

Resistance levels: 118.35, 118.75, 119.25

Support levels: 116.80, 116.50, 116