Fundamental overview:

USD/JPY is expected to trade in a higher range. It is supported by the reduced safe haven appeal of the yen and the yen-funded carry trades amid positive global risk sentiment (VIX fear gauge eased 10.81% to 17.33; S&P 500 closed 1.44% higher at 2,050.03 overnight). It is caused by fall in oil prices for the 3rd straight day, by worries over Greece's future in the eurozone and by the fact that the RBA joined other central banks in providing further stimulus. USD/JPY is also supported by the higher U.S. Treasury yields (10-year at 1.796% versus 1.673% late Monday), the demand from Japan's importers and the ultra-loose Bank of Japan monetary policy. But the USD/JPY gains are tempered by the Japanese exports, the weaker dollar sentiment (ICE spot dollar index last 93.77 versus 94.56 early Tuesday) on 3.4% drop in the U.S. December factory orders (versus forecast -2.5%).

Technical comment:
The daily chart is mixed, the MACD is bearish, but stochastics is neutral; five and 15-day moving averages are meandering sideways, intraday-range pattern was completed on Tuesday.

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 118.20 and the second target at 118.45. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 117. A break of this target would push the pair further downwards, and one may expect the second target at 116.55. The pivot point is at 117.40.

Resistance levels:
118.20
118.45
118.75
Support levels:
117
116.55
116.80