Overview:

USD/JPY is expected to trade in a lower range. It is undermined by unwinding of JPY-funded carry trades and flows to safe-haven yen amid increased risk aversion (VIX fear gauge rose 4.23% to 14.8, S&P fell 0.51% overnight) as concerns persist over the crisis in Ukraine. Crimea is due to hold a referendum on Sunday on whether to split from Ukraine and join Russia and health of the China's economy. USD/JPY is also weighed by the lower U.S. Treasury yields, Japanese exports sales and worse-than-expected drop in the U.S. NFIB Index of Small Business Optimism to 91.4 in February from 94.1 in January (versus 93.4 forecast). But USD/JPY losses are tempered by the demand from the Japanese importers and loose Bank of Japan monetary policy; BOJ on Tuesday kept monetary policy unchanged as it pledged to expand the monetary base annually by 60 to 70 trillion yen.

Technical сomment:
Daily chart is mixed as MACD is bullish, 5-day moving average is above 15-day MA and is advancing but stochastics is bearish at overbought zone.

Trading recommendation:

The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 102.4. A breach of this target will move the pair further downwards to 102.2. The pivot point stands at 103.15. In case the price moves in the opposite direction, bounces back from support level, and then moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 103.4 and the second target at 103.7.

Resistance levels:
103.4
103.7
104

Support levels:
102.4
102.2
102.05