Overview:

USD/JPY is expected to consolidate with bullish bias as markets await 1900 GMT FOMC interest rate announcement, this is the last meeting for Ben Bernanke as the chairman of the Federal Reserve. The Fed is expected to continue scaling back its monthly bond-buying program by another $10 billion to $65 billion. USD/JPY is underpinned by yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 9.3% to 15.8; S&P rose 0.61% overnight) as worries receded over emerging-market countries after Turkish central bank hiked its overnight lending rate to 12% from 7.75%; stronger-than-expected rise in U.S. Conference Board consumer confidence index to 80.7 in January (versus 77.6 forecast) from revised 77.5 in December (originally reported as 78.1) and 13.7% on-year rise in S&P / Case-Shiller 20-city home price index in November (although slightly below +13.8% forecast). USD/JPY is also supported by demand from Japan importers and ultra-loose Bank of Japan's monetary policy. But dollar sentiment is dented by the surprise 4.3% drop in U.S. December durable goods orders (defying forecast for 1.5% rise) and fall in Richmond Fed's manufacturing activity index to 12 in January from 13 in December. USD/JPY gains are also tempered by Japan exporter sales.

Technical сomment:
Daily chart is mixed as MACD is bearish, five and 15 day moving averages are declining; but stochastics is turning bullish near oversold zone.

Trading recommendation:

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 far as the price is above its pivot point, a long position is recommended with the first target at 103.55 and the second target at 103.8. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.25. A breach of this target will push the pair further downwards and one may expect the second target at 101.9. The pivot point is at 102.45.

Resistance levels:
103.55
103.8
104.1

Support levels:
102.25
101.9
101.75