Overview:

USD/JPY is excpected to consolidate with a bullish bias after hitting a three-week high at 103.15 on Wednesday. It is underpinned by the positive dollar sentiment (ICE spot dollar index last 81.42 versus 81.21 early Wednesday) on stronger-than-expected 4.0% annual growth in U.S. 2Q GDP (versus forecast +3.0%), higher U.S. Treasury yields (two-year yield rose as high as 0.591%--highest since May 2011). USD/JPY is also supported by the demand from Japanese importers. But USD sentiment is dented by the weaker-than-expected 218,000 increase in ADP U.S. July private sector jobs (versus forecast +238,000). USD/JPY gains are also tempered by Japan's export sales. Mixed reaction to Federal Open Market Committee's long-awaited decision to cut its monthly bond purchases by another $10 billion to $25 billion overnight as the Federal Reserve made no change to its expectation that policy would stay accommodative for a "considerable time" after the program ends. The Fed took note of improvement in the labor market and that inflation has moved closer to the central bank's longer-run objective. However, policymakers said a range of the labor market indicators suggests that significant underutilization of labor resources is still valid, and the recovery in the housing sector remains slow. Overnight, the VIX fear gauge rose 0.38% to 13.33, S&P 500 was up 0.01% at 1,970.07, while DJIA slipped 0.19% to 16,880.36.

Technical comment:
The daily chart is positive-biased as the five-day moving average is above 15-day MA and is advancing, MACD and stochastics are bullish, although the latter is in the overbought zone.

Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 103.15 and the second target at 103.40. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.40. A break of this target would push the pair further downwards and one may expect the second target at 102.15. The pivot point is at 102.55.

Resistance levels:
103.15
103.40
103.75

Support levels:
102.40
102.15
101.85