Fundamnetal Overview:

USD/JPY is expected to consolidate with a bullish bias after hitting a near-six-year high at 106.09 on Monday. It is underpinned by the positive dollar sentiment (ICE spot dollar index last 84.31 versus 83.83 early Monday) after a research report released on Monday from the Federal Reserve Bank of San Francisco reading that "evidence based on surveys, market expectations, and model estimates show that the public seems to expect a more accommodative policy than Federal Open Market Committee participants," triggering speculation that the Fed might sound less dovish than expected at next week's FOMC policy meeting. USD/JPY is also supported by the demand from Japan importers amd 6.4% rise in Conference Board U.S. employment trends index to 121.29 in August; more-than-expected $26.01 billion increase in U.S. July consumer credit (versus forecast +$17.5 billion), higher U.S. Treasury yields (10-year at 2.471% versus 2.460% late Friday) and weaker JPY sentiment after Japan's 2Q annualized GDP revised down to -7.1% from preliminary -6.8% and capital expenditure revised down to -5.1% from preliminary -2.5%, fuelling fears that the sales tax increase in April has hurt the economy more than expected. But USD/JPY gains are tempered by the Japan exporter sales.

Technical comment:
The daily chart is positive-biased as MACD is bullish, stochastics stays elevated in the overbought zone, 5 and 15-day moving averages are advancing.

Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 106.50 and the second target at 107. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 105.40. A break of this target would push the pair further downwards and one may expect the second target at 104.95. The pivot point is at 105.70.

Resistance levels:
106.50
107
107.35

Support levels:
105.40
104.95
104.70