USD/JPY is expected to range-trade. It is underpinned by the broadly firmer US dollar undertone (ICE spot dollar index last 96.68 versus 96.25 early Tuesday) as markets are awaiting further developments in Greece's negotiations with the European Union for emergency financing. USD/JPY is also supported by the narrower-than-expected US trade deficit of $41.87 billion (versus forecast $42.5 billion) in May and diminished investor risk aversion (VIX fear gauge eased 5.41% to 16.09, S&P 500 closed 0.61% higher at 2,081.34 overnight) amid hopes that consensus could still be reached to avoid a potentially disorderly Greece's exit of the eurozone. New Greek finance minister Euclid Tsakalotos made a strong presentation to his counterparts on Tuesday. Another facts behind the ongoing sistuation are demand from Japanese importers and ultra-loose Bank of Japan's monetary policy. Upside, USD/JPY is limited by lower US treasury yields (10-year slipped 2.3 bps to 2.254% Tuesday)and Japan exporter sales.

Technical comment:

The daily chart is still negative-biased as the MACD and stochastics are bearish, five- and 15-day moving averages are declining, although inside-day-range pattern was completed on Tuesday.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 121.40. A break of that target will move the pair further downwards to 121. The pivot point stands at 122.25. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to mo ve further to the upside. According to that scenario, long positions are recommended with the first target at 122.60 and the second target at 122.90.

Resistance levels: 122.60 122.90 123.30

Support levels: 121.40 121 120.50