Fundamental overview:
USD/JPY is expected to consolidate with risks skewed lower as markets await 1900 GMT Federal Reserve monetary policy decision, the Fed isn't expected to make any change in monetary policy but market participants will be interested in any change in wording, especially to the phrases "considerable time" and the Fed "can be patient." USD/JPY is undermined by the weaker dollar sentiment (ICE spot dollar index last 93.96 versus 94.97 early Tuesday) on selloff in U.S. stocks (S&P 500 closed down 1.34% at 2,029.55 overnight), positions adjustment before the FOMC statement. Surprise 3.4% on-month drop in U.S. December durable goods orders (versus forecast +0.3%) and weaker-than-expected 4.3% on-year rise in U.S. November S&P/Case-Shiller 20-city home price index (versus forecast +4.6%) outweighed stronger-than-expected rise in U.S. Conference Board consumer confidence index to 102.9 in January from December's 92.6 (versus forecast 95.1), larger-than-expected 11.6% increase in U.S. new home sales to 481,000 in December (forecast +3.0%) and stronger-than-expected U.S. January flash services PMI of 54.0 (versus forecast 53.8 and December's 53.3). USD/JPY is also weighed by Japan's export sales and reduced hopes for extra monetary easing steps by the Bank of Japan after Economy minister Akira Amari said the BOJ wasn't constrained by a two-year schedule for achieving its 2% inflation target; flows to haven yen amid increased risk aversion (VIX fear gauge rose 10.95% to 17.22) on disappointing U.S. corporate earnings, caution before FOMC decision, and lingering concerns about a potential showdown between Greece's new government and its international creditors. But USD/JPY losses are tempered by the demand from Japan's importers and ultra-loose Bank of Japan's monetary policy.

Technical comment:
Daily chart is mixed as MACD is bearish but stochastics is neutral. T

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 118.50 and the second target at 118.85. In an alternative scenario, if the price moves below its pivot points, short position is recommended with the first target at 117.20. A break of this target would push the pair further downwards and one may expect the second target at 116.80. The pivot point is at 117.55.

Resistance levels:
118.50
118.85
119.35
Support levels:
17.20
116.80
116.50