Fundamental outlook:
We expect range trade with USD/JPY.I t is underpinned by positive dollar sentiment (ICE spot dollar index last 99.28 versus 98.97 early Friday) amid investors' confidence over the US economy recovery and expectations of interest-rate hike in the second half of 2015 (Fed's Lacker reiterated Friday that he sees a strong case for the US central bank to begin raising short-term rates this summer). USD/JPY is also supported by the reduced safe-haven appeal of the yen amid positive global risk sentiment (VIX fear gauge eased 3.9% to 12.58; S&P 500 closed up 0.52% at 2,102.06 Friday), demand from Japan importers, and ultra-loose Bank of Japan's monetary policy. But USD/JPY upside is limited by the lower longer-dated US Treasury yields (10-year at 1.953% versus 1.958% late Thursday) and Japan exporter sales.

Technical comment:
The daily chart is still positive-biased as the MACD and stochastic are in bullish mode, although inside-day-range pattern was completed on Friday.

Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a wider range as far as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 120.80 and the second target at 121.20. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 119.65. A break of this target is likely to push the pair further downwards, and one may expect the second target at 119.40. The pivot point is at 120.

Resistance levels:
120.80
121.20
121.65

Support levels:
119.65
119.40
119.15