Fundamental overview:

USD/JPY is expected to consolidate with bearish bias after hitting one-month low at 106.76 this morning. It is undermined by the negative dollar sentiment (ICE spot dollar index last 85.22 versus 85.72 early Monday) after Federal Reserve Bank of Chicago President Charles Evans said the "biggest risk" to the economy right now is that the central bank would raise interest rates sooner than it should. That follows his remarks on Saturday that a stronger dollar is a headwind as it will limit the Fed's ability to meet its inflation mandate and will impede growth and comment from Fed Vice Chairman Stanley Fischer that the impact on the U.S. economy of weaker-than-expected foreign growth could cause "the Fed to remove accommodation more slowly than otherwise." USD/JPY is also weighed by the Japanese exporter sales, flows to haven JPY and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 16.01% to 24.64, S&P 500 fell 1.65% to close at 1,871.74 overnight) as fears mount over the spread of Ebola and worries persist over slowing global economic growth. But USD/JPY losses are tempered by the demand from Japan importers and ultra-loose Bank of Japan's monetary policy. Daily chart is negative-biased as MACD and stochastics are bearish, although latter is at oversold zone, five-day moving average is below 15-day MA and is declining.

Technical comment:
Daily chart is negative-biased as MACD and stochastics are bearish, although latter at oversold, five-day moving average is below 15-day MA 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 its pivot point. Short position is recommended with the first target at 106.75. A break of this target will move the pair further downwards to 106.50. The pivot point stands at 107.65. In case the price moves in the opposite direction and bounces back from the support level, then it will move above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 108.20 and the second target at 108.50.

Resistance levels:
108.20
108.50
108.80

Support levels:
106.75
106.50
106.25