Overview:

USD/JPY is expected to trade in lower range. It is undermined by the unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 9.79% to 11.33, S&P 500 closed 0.39% lower at 1,977.65 overnight) as U.S. stocks--after last week's push to record highs retreated ahead of the start of the U.S. second-quarter earnings season (after Wall Street's close on Tuesday), while weaker-than-expected industrial data from Germany dented sentiment. USD/JPY is also weighed by the lower U.S. Treasury yields and Japan exporter sales. But USD sentiment is soothed by rise in Conference Board U.S. employment trends index to 119.62 in June from revised 119.03 in May (first reported as 118.58). USD/JPY losses are also tempered by the demand from Japan importers.

Technical comment:
Daily chart is mixed as MACD is bullish, five-day moving average is above 15-day MA and is advancing, but stochastics is turning bearish.

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 101.35. A breach of this target will move the pair further downwards to 101.20. The pivot point stands at 101.80. In case the price moves in the opposite direction and bounces back from the 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 and the second target at 102.25.

Resistance levels:
102
102.25
102.50

Support levels:
101.35
101.20
101