Overview:

USD/JPY is expected to consolidate with bullish bias after hitting one-month high at 102.49 on Monday.It is underpinned by the yen-funded carry trades amid positive investor risk sentiment as U.S. stocks ended mostly higher Monday (S&P 500 hit all-time high 1,925.88 before closing up 0.07% at 1,924.97; Nasdaq off 0.13%) in a whippy session after twice-corrected data from U.S. Institute for Supply Management. Risk appetite is boosted by the stronger-than-expected final China May official manufacturing PMI which hit a five-month high of 50.8, while Market final U.S. May manufacturing PMI of 56.4 (versus preliminary reading of 56.2 and April's 55.4) offset lower-than-expected rise in U.S ISM manufacturing PMI to 55.4 in May from 54.9 in April (versus 55.6 forecast) and smaller-than-expected 0.2% increase in U.S. April construction spending (versus +0.6% forecast). USD/JPY is also supported by the demand from Japan importers and higher U.S. Treasury yieldsm broadly stronger USD undertone (ICE spot dollar index last 80.63 versus 80.41 early Monday). But USD/JPY gains are tempered by the Japan exporter sales.

Technical comment:
Daily chart is positive-biased as MACD and stochastics are bullish, five-day moving average is above 15-day MA and is advancing.

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 102.35 and the second target at 102.65. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.55. A breach of this target will push the pair further downwards and one may expect the second target at 101.40. The pivot point is at 101.75.

Resistance levels:
102.35
102.65
102.95

Support levels:
101.55
101.40
101.20