Overview:

USD/JPY is expected to trade in a lower range. It is undermined by the selling of yen crosses amid diminished investor risk appetite (VIX fear gauge rose 1.43% to 10.99) as U.S. stocks closed mixed near the flat line overnight (S&P slipped 0.02%, DJIA gained 0.02%, Nasdaq up 0.04%). USD/JPY is also weighed by Japan exporter sales. But USD/JPY losses are tempered by the higher U.S. Treasury yields, positive dollar sentiment (ICE spot dollar index last 80.81 versus 80.62 early Tuesday) on rise in U.S. NFIB Index of Small Business Optimism to 96.6 in May--its highest since September 2007--from 95.2 in April, larger-than-expected 1.1% increase in U.S. April wholesale inventories (versus +0.6% forecast) and demand from Japan importers.

Technical comment:
Daily chart is mixed as MACD is bullish, but stochastics is bearish at overbought zone.

Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 170.70. A breach of this target will move the pair further downwards to 170.30. The pivot point stands at 171.55. In case the price moves in the opposite direction and bounces back from the support level, and then it moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 171.90 and the second target at 172.35.

Resistance levels:
102.40
102.60
102.80

Support levels:
101.80
101.70
101.50