Overview:

USD/JPY is expected to trade in a higher range. It is supported by the buying of yen crosses amid diminished risk aversion (VIX fear gauge eased 4.05% to 12.08 , S&P 500 rose 0.15% Friday to close at 1,967.57) as markets returned to the calm mode after Thursday's jolt over euro-zone banking sector woes. USD/JPY is also buoyed by the demand from Japanese importers. But USD/JPY upside is limited by Japan export sales and lower U.S. Treasury yields as well as caution ahead of Fed Chairwoman Janet Yellen's semiannual testimony before lawmakers on the economy and rate-policy release the outlook on Tuesday and Wednesday. The two-day policy meeting of Bank of Japan started on Monday. BOJ is expected to maintain its policy of increasing the country's monetary base at an annual pace of Y60 trillion to Y70 trillion. It may stick to its upbeat view on inflation, possibly stifling expectations for additional monetary easing in the coming months.

Technical comment:
The daily chart is still negative-biased as MACD and stochastics are in the bearish mode.

Trading recommendation:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 101.80 and the second target at 102. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.20. A break of this target would push the pair further downwards and one may expect the second target at 101.05. The pivot point is at 101.35.

Resistance levels:
101.80
102
102.25

Support levels:
101.20
101.05
100.80