The USD/JPY pair is expected to trade with a bearish bias as the key resistance is seen at 123.15. Overnight, the US stock indices closed lower, dragged by declining health-care and consumer staples shares. The Dow Jones Industrial Average fell 0.4% to 17719, the S&P 500 dropped 0.5% to 2080, while the Nasdaq Composite was down by 0.4% to 5108. Nymex crude oil edged down 0.1% to $41.65 a barrel, gold rebounded 0.5% to $1,064 an ounce, and the benchmark 10-year Treasury yield remained stable at 2.220%.

Meanwhile, the US dollar consolidated after last Friday's gains. The AUD/USD pair gained 0.5% to 0.7226, NZD/USD was up by 0.8% to 0.6580, and USD/CHF declined 0.2% to 1.0286. On the other hand, EUR/USD declined 0.3% to 1.0563 and USD/JPY was up by 0.2% to 123.08. The pair posted a technical rebound last night, but remains under pressure below its nearest resistance at 1.5070, which should maintain selling pressure. The intraday relative strength index is close to its horizontal resistance at 70, and seems to be losing its upward momentum. Therefore, the upward potential is likely to be limited by the resistance at 123.15. Below this threshold, look for a new pullback to 122.50 and 122.25 (the low of November 30).

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 122.50. A break of that target will move the pair further downwards to 122.25. The pivot point stands at 123.15. 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 123.35 and the second target at 123.60.

Resistance levels: 123.35 123.60 124

Support levels: 122.50 122.25 122