USD/JPY is expeceted to consolidate with bullish bias after hitting the monthly high of 124.38 on Monday. the pair is underpinned by the positive dollar sentiment (ICE spot dollar index last 98.01 versus 97.96 early Monday) after Fed's Bullard said he sees more than 50% probability for the US central bank to tighten the monetary policy in September. USD/JPY is also supported by the higher US Treasury yields (10-year rose 3.0 bps to 2.379% Monday), some stronger-than-expected US earnings reports, demand from Japan's importers, the Bank of Japan's ultra-loose monetary policy, and reduced safe-haven appeal of the yen as investor risk aversion subsides amid receding fears about Greece's financial situation and the signs of stabilization in China's stock markets. But USD/JPY gains are tempered by the Japanese exports.

Technical comment:

The daily chart is positive-biased as the MACD and stochastics are bullish, although the latter one is at overbought levels. Five-day moving average is above 15-day moving average and is advancing.

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 124.60 and the second target at 124.90. In the alternative scenario, short positions are recommended with the first target at 123.70 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 123.35. The pivot point is at 123.90.

Resistance levels: 124.60 124.90 125.45

Support levels: 123.70 123.35 123