USD/JPY is expected to trade with a downward bias above 103.80. The pair stands firmly above its key intraday support at 103.80, and seems likely to post some consolidations before further upside. The rising 50-period moving average plays a support role, and should continue to push the prices higher. Last but not least, the relative strength index is positive above its neutrality area at 50.

On Monday, U.S. stocks jumped over 2% on easing uncertainty over the presidential election. The market priced in greater odds of a win by Hillary Clinton after the FBI said on Sunday that it would take no action against her. The S&P 500 surged 46 points (+2.2%) to 2,131 snapping its 9-session losing streak, the longest one since December 1980. The Dow Jones Industrial Average rose 371 points (+2.1%) to 18,259, and the Nasdaq Composite was up 119 points (+2.4%) to 5,166.

At the same time, the U.S. dollar surged as investors grew more confident of Clinton's win, which is expected to be less disruptive for markets and therefore more supportive of a U.S. interest-rate increase in December. The ICE U.S. Dollar Index jumped 0.6% to 97.737, ending a four-day losing streak.

Hence, as long as 103.80 is not broken, look for a new rise to 105.10 and 105.50 in extension.

Trading Recommendation: 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. Therefore, long positions are recommended with the first target at 105.10 and the second one at 105.50. In the alternative scenario, short positions are recommended with the first target at 103.30 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 102.80. The pivot point lies at 103.80.

Resistance levels: 105.10, 105.50, 106

Support levels: 103.30, 102.80, 102.55