Fundamental outlook:
USD/JPY is expected to consolidate with bearish bias after hitting an eight-day low of 118.79 on Wednesday. It is undermined by the weaker dollar sentiment (ICE spot dollar index last 98.39 versus 98.78 early Wednesday) after a bigger-than-expected on-month drop of 0.6% in the U.S. March industrial production (versus forecast -0.4%), lower-than-expected capacity utilization of 78.4% (versus forecast 78.6%), and a surprise drop in the Empire State's business conditions index to -1.19 in April from 6.90 in March (versus forecast for rise to 8.0). USD/JPY is also weighed by the lower U.S. Treasury yields (2-year at 0.500% versus 0.516% late Tuesday), and Japan's exports. But the USD/JPY losses are tempered by the demand from the Japanese importers, the ultra-loose Bank of Japan's monetary policy and buying of yen crosses amid positive risk sentiment (VIX fear gauge eased 6.07% to 12.84; S&P 500 closed up 0.51% at 2,106.63 overnight) as oil prices advanced strongly (Nymex crude settled up $3.10 at $56.39/bbl Wednesday).

Technical comment:
The daily chart is negative-biased as the MACD and stochastics are bearish. Five-day moving average is falling below 15-day moving average. Bearish parabolic stop-and-reverse signal was hit on Wednesday.

Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 118.65. A break of that target will move the pair further downwards to 118.30. The pivot point stands at 119.75. 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 120.05 and the second target at 120.40.

Resistance levels:
120.05
120.40
120.80
Support levels:
118.65
118.30
118