Overview:

USD/JPY is expected to consolidate with the bullish bias. Markets are awaiting 1400 GMT Federal Reserve Chairwoman Yellen's Monetary Policy Report to the U.S. Senate Banking Committee. Her comments will be scrutinized for clues of the Federal Reserve's timing for an interest rate rise, which is currently expected in mid-2015. USD/JPY is supported by the yen-funded carry trades amid positive risk sentiment (VIX fear gauge eased 2.15% to 11.82, S&P 500 rose 0.48% overnight to close at 1,977.1) as better-than-expected earnings from Citigroup lifted investor mood and concerns over Portuguese banking system fade. USD/JPY is also supported by the demand from Japanese importers and higher U.S. Treasury yields. But USD/JPY gains are tempered by Japanese export sales.

Technical comment:
The daily chart is mixed as MACD is bearish, but stochastics is turning bullish.

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 101.85 and the second target at 102.05. 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:
101.85
102.05
102.25

Support levels:
101.20
101.05
100.80