Fundamental outlook:

USD/JPY is expected to trade in a lower range. It is undermined by the negative dollar sentiment (ICE spot dollar index last 93.68 versus 94.56 early Wednesday) after the US April retail sales came flat on-month (versus forecast for 0.2% increase), an unexpected drop in the US April import price index by 0.3% on-month (versus forecast +0.3%), and smaller-than-expected 0.1% on-month increase in US business inventories in March (versus forecast +0.2%). The US yield curve steepened overnight (2-year fell to 0.580% from 0.604%, 10-year rose to 2.294% from 2.247%) USD/JPY is also weighed by Japan export sales. But USD/JPY losses are tempered by demand from Japan importers and ultra-loose Bank of Japan's monetary policy.

Technical comment:
The daily chart is tilting negative as the MACD and stochastics are turning bearish, bearish parabolic stop-and-reverse signal hit on Wednesday.

Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 118.75. A break of that target will move the pair further downwards to 118.50. The pivot point stands at 119.35. 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, long positions are recommended with the first target at 119.70 and the second target at 120.05.

Resistance levels:
119.70
120.05
120.50

Support levels:
118.75
118.50
118