The USD/JPY pair is expected to trade with a bullish bias above 123.05. Overnight, energy shares brought down the US stock indices as Nymex crude oil plunged 4.6% to $39.94 a barrel. The Dow Jones Industrial Average dropped 0.9% to 17729, the S&P 500 fell 1.1% to 2079, while the Nasdaq Composite was down by 0.6% at 5123. Gold lost 1.5% to $1,053 an ounce, while the benchmark 10-year Treasury yield rose to 2.178% from 2.155% at the previous session.

Meanwhile, the US Federal Reserve Chairwoman Janet Yellen expressed confidence in the country's economic growth, which investors took as a signal that she is ready to raise rates this month. Also, the ADP private payrolls added 217,000 jobs in November (vs 190,000 rise expected, 196,000 rise in October). As a result the Wall Street Journal Dollar Index rose as high as 91.02, with is its highest level since December 2002. the EUR/USD pair declined 0.2% to 1.0611, GBP/USD dropped 0.9% to 1.4948, AUD/USD fell 0.2% to 0.7307, while USD/JPY was up by 0.3% to 123.24. The pair has entered the consolidation zone after surging as high as 123.67 overnight. Having the key support located at 123.05, it is currently trading in the support area around the rising 50-period intraday (30-minute chart) moving average. And the relative strength index is around the neutrality level of 50 lacking downward momentum. As long as 123.05 holds as the key support, the pair is expected to regain the first upside target at 123.75 (around yesterday's high) before heading toward 124.00.

Trading recommendations:

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. As long as the price holds above its pivot point, long positions are recommended with the first target at 123.75 and the second target at 124. In the alternative scenario, short positions are recommended with the first target at 122.75 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 122.50. The pivot point is at 123.05.

Resistance levels: 123.75 124 124.50

Support levels: 122.75 122.50 122.25