Overview:

USD/JPY is expected to trade in a lower range. The liquidity was thin in Asia as financial markets in Japan, Hong Kong, and South Korea were shut Tuesday for public holidays. USD/JPY is underpinned by the yen-funded carry trades on positive investor risk appetite (S&P 500 closed 0.19% higher overnight at 1,884.66) as stronger-than-expected rise in U.S. ISM non-manufacturing PMI to 55.2 in April from 53.1 in March (versus 54.1 forecast); outweighed disappointing China's factory data (final April HSBC China manufacturing PMI came in at 48.1 versus preliminary reading of 48.3), and violence in Ukraine. USD/JPY is also supported by the final Markit U.S. April services PMI coming in at 55.0 versus flash estimate of 54.2, rise in U.S. Conference Board employment trends index to 118 in April from upwardly revised 117.77 in March (first reported as 117.52), and higher U.S. Treasury yields and sell-yen orders from Japan's importers. But USD/JPY gains are tempered by the buy-yen orders from Japan's exporters.

Technical сomment:
Daily chart is mixed as MACD and stochastics is in bearish mode, but five-day moving average is meandering sideways.

Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 101.45. A breach of this target will move the pair further downwards to 101.30. The pivot point stands at 101.95. In case the price moves in the opposite direction and bounces back from support level, and then it moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 102.20 and the second target at 102.50.

Resistance levels:
102.20
102.50
102.80

Support levels:
101.45
101.30
101.10