Fundamental overview:

USD/JPY is expected to consolidate in a higher range. USD/JPY is undermined by the weaker dollar sentiment (ICE spot dollar index last 85.57 versus 85.69 early Monday) on smaller-than-expected +0.3% on-month increase in U.S. September pending home sales index (versus forecast +1.0%). USD/JPY is also weighed by the lower U.S. Treasury yields (10-year at 2.258% versus% 2.273% late Friday), Japan's export sales, unwinding JPY-funded carry trades amid diminished investor risk appetite as U.S. stocks closed mixed overnight (S&P 500 fell 0.15%, DJIA gained 0.07%) as a disappointing business confidence report from Germany raised concerns over the growth outlook in the eurozone, while caution prevailed ahead of Wednesday's policy announcement from the Federal Reserve. But USD/JPY losses are tempered by the demand from Japan's importers and ultra-loose Bank of Japan monetary policy.

Technical comment:
Daily chart is mixed as stochastics is bullish, five-day moving average is above 15-day MA and advancing but MACD is still in a bearish mode.

Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 108.35 and the second target at 108.75. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 107.35. A break of this target would push the pair further downwards and one may expect the second target at 107.05. The pivot point is at 107.55.

Resistance levels:
108.35
108.75
109

Support levels:
107.35
107.05
106.75