Fundamental Overview:
USD/JPY is expected to consolidate with a bullish bias after hitting a five-week high of 120.73 on Tuesday. USD/JPY is supported by positive dollar sentiment (ICE spot dollar index last 95.29 versus 94.12 early Tuesday) after stronger-than-expected 20.2% increase in US April housing starts (versus forecast +10.2%) and 10.1% increase in US April building permits (versus forecast +1.7%). USD/JPY upward movement is also supported by rising US Treasury yields (10-year rose 6.2 bps to 2.233% Tuesday), demand from Japan importers, and ultra-loose Bank of Japan's monetary policy. But USD/JPY gains are also tempered by the Japan export sales.

Technical comment:
The daily chart is positive-biased as the MACD and stochastics are bullish, five and 15-day moving averages are turning upward, bullish parabolic stop-and-reverse signal was hit on Tuesday.

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 121.20 and the second target at 121.50. In the alternative scenario, short positions are recommended with the first target at 120.30 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 120.10. The pivot point is at 120.50.

Resistance levels:
121.20
121.50
122

Support levels:
120.30
120.10
119.75