Fundamental Outlook:
USD/JPY is expected to trade in a lower range. USD/JPY is undermined by the broadly softer USD undertone (ICE spot dollar index last 96.93 versus 97.83 early Monday) as investors continue to unwind long USD positions after the Federal Reserve downgraded its forecasts for growth and inflation, and lowered its projected path for the rate rises last week. Fed Vice-Chairman Fischer said Monday the US central bank remains on track to raise the short-term rates this year, but warned future rate increases are unlikely to move steadily upwards as they did in past cycles. USD/JPY is also weighed by a less-than-expected on-month increase of 1.2% in US existing home sales to 4.88 million in February (versus forecast +1.7% to 4.9 million), lower US Treasury yields (10-year at 1.909% versus 1.930% late Friday), Japan's exports and flows to the safe-haven yen amid decreased risk tolerance (VIX fear gauge rose 3.0% to 1.341, S&P 500 closed 0.17% lower at 2,104.42 overnight) as uncertainty over Greece lingers. The USD/JPY losses are tempered by demand from the Japanese importers and the ultra-loose Bank of Japan's monetary policy.

Technical comment:
The daily chart is negative-biased as the MACD and stochastics are bearish, 5-day moving average is below 15-day moving average 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 the pivot point. Short positions are recommended with the first target at 119.25. A break of that target will move the pair further downwards to 119. The pivot point stands at 119.95. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, a long position is recommended with the first target at 121.30 and the second target at 121.65.

Resistance levels:
121.30
121.65
121.85

Support levels:
119.25
119
118.75