Fundamental Outlook:
USD/JPY is expected to trade in a lower range. It is undermined by the negative dollar sentiment (ICE spot dollar index last 96.92 versus 97.23 early Wednesday) after a surprise on-month drop of 1.4% in US February durable goods orders (versus forecast +0.2%). USD/JPY is also weighed by the Japanese exports, flows to the safe-haven yen and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 13.36% to 15.44, S&P 500 closed 1.46% lower at 2,061.05 overnight) as the weak data on US durable goods raised concerns about the US economic growth. The USD/JPY losses are tempered by the demand from Japan's importers, the ultra-loose Bank of Japan's monetary policy, and higher US Treasury yields (10-year at 1.928% versus 1.878% late Tuesday) after a $35-billion sale of five-year treasury notes met lacklustre demand.

Technical comment:
The daily chart is negative-biased as the MACD and stochastics are bearish, although the latter is at oversold levels, 5-day moving average is below 15-day moving average and is declining.

Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 118.65. A break of that target will move the pair further downwards to 118.25. The pivot point stands at 119.35. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, a long position is recommended with the first target at 119.95 and the second target at 120.30.

Resistance levels:
119.95
120.30
120.65

Support levels:
118.65
118.25
117.85