Overview:

USD/JPY is expected to trade in lower range undermined by selling of the yen crosses amid elevated risk aversion (VIX fear gauge spiked 16.46% to 21.44, S&P tumbled 2.34% overnight) as much-bigger-than-expected drop in the U.S. ISM manufacturing PMI to 51.3 in January from 56.5 in December (versus 56.0 forecast) following weak official manufacturing PMI data out of China raised concerns over the global growth outlook and emerging markets. USD/JPY is also weighed by the Japanese exports sales, diminished expectations of further monetary easing from the Bank of Japan in near-term, negative dollar sentiment (ICE spot dollar index last 81.06 versus 81.27 early Monday), lower U.S. Treasury yields as weak U.S. PMI gauge and smaller-than-expected 0.1% rise in the U.S. December construction spending (versus +0.2% forecast) added pressure on the Federal Reserve to take it slow in withdrawing monetary stimulus, although Fed's Fisher said late Monday that he hasn't seen anything yet that would diminish his support for slowing the pace of bond-buying. But USD/JPY losses are tempered by the demand from Japan's importers.

Technical сomment:
Daily chart is negative-biased as MACD and stochastics are bearish, stochastics is at oversold zone, 5 and 15 day moving averages are declining.

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. A short position is recommended with the first target at 100.7 in mind. A breach of this target will move the pair further downwards to 100.4. The pivot point stands at 101.65. In case the price moves in the opposite direction, bounces back from support, and then moves above its pivot point, it is most favourably expected to move further to the upside. In that scenario, a long position is recommended with the first target at 102.6 and the second target at 102.9.

Resistance levels:
102.6
102.9
103.25

Support levels:
100.7
100.4
100.1