Overview:

USD/JPY is expected to consolidate with a bullish bias after hitting a three-and-a-half month high at 103.85 on Wednesday. USD/JPY is underpinned by the positive dollar sentiment (ICE spot dollar index last 82.23 versus 81.87 early Wednesday) after more-hawkish-than-expected minutes of the Federal Open Market Committee's July meeting which showed that officials debated whether to raise interest rates sooner than expected. USD/JPY is also supported by the demand from Japan importers and higher U.S. Treasury yields (10-year at 2.428% versus 2.407% late Tuesday); yen-funded carry trades amid positive investor risk appetite (VIX fear gauge eased 3.52% to 11.78, S&P 500 closed up 0.25% at 1,986.51 overnight) as investors are certain the U.S. economy is healthy enough to withstand sooner-than-expected rate increases (market participants would be looking for further clues on Fed's monetary policy from Chairwoman Yellen's speech at the Jackson Hole forum for global central bankers on Friday). But USD/JPY gains are tempered by Japanese export sales. The daily chart is positive-biased as MACD and stochastics are bullish, five and 15-day moving averages are advancing.

Technical comment:
Tjhe daily chart is positive-biased as MACD and stochastics are bullish, five and 15-day moving averages are advancing.

Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 104.10 and the second target at 104.50. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 103. A break of this target would push the pair further downwards and one may expect the second target at 102.70. The pivot point is at 103.40.

Resistance levels:
104.10
104.50
104.80

Support levels:
103
102.70
102.50