Overview:

USD/JPY is expected to consolidate with bullish bias after hitting a seven-day high at 102.36 on Tuesday. It is underpinned by the yen-funded carry trades amid diminished investor risk aversion (VIX fear gauge eased 0.82% to 12.13) as the U.S. stocks closed mostly higher overnight with the Dow Jones Industrial Average and S&P 500 touching all-time highs (S&P 500 hit record-high 1,902.17 before closing up 0.04% at 1,897.45) as expectations of continued policy accommodation by G3 central banks and rise in the U.S. NFIB's Small Business Optimism Index to 95.2 in April--the index's first reading above 95 since October 2007 from 93.4 in April overshadowed smaller-than-expected 0.1% increase in the U.S. April retail sales (versus +0.4% forecast) and disappointing economic data out of China. USD/JPY is also supported by broadly stronger USD undertone (ICE spot dollar index last 80.10 versus 79.88 early Tuesday) as EUR/USD tumbled to five-week lows and demand from Japan importers. But USD/JPY gains are tempered by the surprise 0.4% drop in April import price index (versus forecast for 0.4% increase) and lower U.S. Treasury yields on weaker-than-expected U.S. April retail sales and Japan exporter sales.

Technical сomment:
Daily chart is positive-biased as stochastics is rising from oversold zone, MACD is staging bullish crossover against its exponential moving average.

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 101.60. A breach of this target will move the pair further downwards to 101.40. The pivot point stands at 102.10. In case the price moves in the opposite direction and bounces back from support level, and then it 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 102.35 and the second target at 102.55.

Resistance levels:
102.35
102.55
102.85

Support levels:
101.60
101.40
101.20