USD/JPY is expected to trade in a range. It is underpinned by higher longer-dated US Treasury yields (10-year rose 4.1 bps to 2.412% Thursday) after bigger-than-expected 0.9% increase in US May's personal spending (the largest increase since August 2009 versus the forecast for +0.7%), fewer-than-expected 271,000 US jobless claims in a week ended on June 20 (versus the forecast for 273,000), and June's stronger-than-expected Kansas City Fed manufacturing activity index of -9 (versus forecast -10). USD/JPY is also supported by demand from Japanese importers and ultra-loose Bank of Japan's monetary policy. However, USD sentiment is dented by the weaker-than-expected Markit US June flash services PMI of 54.8 (versus the forecast for 56.7). USD/JPY gains are also tempered by the Japan's exporters, flows to haven yen amid increased risk aversion (VIX fear gauge rose 5.66% to 14.01, S&P 500 closed 0.3% lower at 2,102.31 overnight) because of continuing uncertainty over the Greek issue (Thursday's talks between Athens and eurozone's finance ministers ended without any agreement once again, and are scheduled to reopen on Saturday), and positions adjustment ahead of weekend.

Technical comment:

The daily chart is mixed as stochastics is rising from oversold levels but the MACD is in bearish mode.

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 122.95. A break of that target will move the pair further downwards to 122.55. The pivot point stands at 123.75. 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 124 and the second target at 124.60.

Resistance levels: 124 124.30 124.60

Support levels: 122.95 122.55 122