USD/JPY is expected to continue the rebound. The pair is turning up on the support of 103.15, while the 20-period moving average is crossing above the 50-period one, calling for a further bounce as possible. Meanwhile the relative strength index is above 50 and lacks downward momentum.

The U.S. Federal Reserve pointed out in its latest Beige Book that economic activity in the U.S. continues to expand and the labor market remains tight.

The U.S. Energy Information Administration reported a surprise drawdown of 5.2 million barrels in crude stocks in the week ended Oct. 14, against a 2.7-million barrel build expected. Crude imports to the U.S. fell 912,000 barrels to 6.47 million barrels per day, the lowest since November 2015. As a result, Nymex crude jumped 2.6% to $51.60 a barrel, the highest level since July 2015.

After a two-day rally, U.S. government bonds held relatively steady, with the benchmark 10-year U.S. Treasury yield inching higher to 1.752% from 1.748% Tuesday.

Therefore, as long as 103.15 is not broken below, further bounce is expected with 103.95 and 104.20 as the next targets.

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 103.95 and the second one at 104.20. In the alternative scenario, short positions are recommended with the first target at 102.80 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 102.40. The pivot point lies at 103.15.

Resistance levels: 103.95, 104.20, 104.85

Support levels: 102.80, 102.40, 102.00