Fundamental overview:

USD/JPY is expected to trade in a higher range. It is underpinned by the positive dollar sentiment (ICE spot dollar index last 95.60 versus 94.99 early Tuesday) after stronger-than-expected US June Conference Board consumer confidence index of 101.4 (versus forecast 97.4). USD/JPY is also supported by the higher US Treasury yields (10-year rose 1.8 bps to 2.349% Tuesday), demand from Japan's importers, the Bank of Japan's ultra-loose monetary policy, reduced safe-haven appeal of the yen amid improved risk sentiment (VIX fear gauge eased 3.29% to 18.23; S&P 500 closed up 0.27% at 2,063.11 overnight) as markets were relatively calm even as Greece defaulted on its IMF loan repayment and its current bailout expires. But USD sentiment is dented by the weaker-than-expected US June ISM-Chicago PMI of 49.4 (versus forecast 50.2). USD/JPY gains are also tempered by the Japanese exports.

Technical comment:

The daily chart is still negative-biased as the MACD and stochastics are bearish.

Trading recommendations:

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 123.50 and the second target at 124. In the alternative scenario, short positions are recommended with the first target at 121.70 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 121.40. The pivot point is at 122.70.

Resistance levels: 123.50 124 124.50

Support levels: 121.70 121.40 121