Overview:

USD/JPY is expected to trade in a higher range. USD/JPY is undermined by the negative dollar sentiment (ICE spot dollar index last 80.58 versus 80.77 early Thursday) on weaker-than-expected 0.3% increase in U.S. May retail sales (versus +0.7% forecast), surprise 4,000 increase in U.S. jobless claims to 317,000 in week ended June 7 (versus 310,000 forecast) and smaller-than-expected 0.1% rise in U.S. May import price index (versus +0.2% forecast). USD/JPY is also weighed by Japan's export sales, lower longer-dated U.S. Treasury yields, flows to haven JPY and unwinding of JPY-funded carry trades amid heightened risk aversion (VIX fear gauge surged 8.28% to 12.56; S&P 500 off 0.71% overnight) due to the escalating conflict in Iraq and weak U.S. data which dented hopes that the U.S. economy is poised to accelerate. But USD/JPY losses are tempered by the demand from Japan's importers and positions adjustment before the weekend.

Technical comment:
Daily chart is negative-biased as stochastics is falling from the overbought zone, MACD staged bearish crossover against its exponential moving average.

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 102.20 and the second target at 102.40. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.55. A breach of this target will push the pair further downwards and one may expect the second target at 101.45. The pivot point is at 101.70.

Resistance levels:
102.20
102.40
102.60

Support levels:
101.55
101.45
101.20