Fundamental overview:

USD/JPY is expected to consolidate with bearish bias after hitting a six-day low of 117.90 on Tuesday. It is undermined by the selling of the yen crosses amid diminished risk appetite (VIX fear gauge rose 4.79% to 14.89, S&P 500 fell as low as 2,034.17 overnight before closing roughly flat at 2,056.59 versus the previous close of 2,060.31) as investor sentiment soured after China on Tuesday unexpectedly tightened credit conditions to rein in lending, triggering a 5.31% plunge in Shanghai Composite for sharpest fall in five years. At the same time, the fears over the integrity of the European monetary union were reignited after the Greek Prime Minister Antonis Samara moved forward a high-stakes parliamentary vote for president. USD/JPY is also weighed by the lower U.S. Treasury yields (10-year at 2.216% versus 2.257% late Monday) and broadly weaker USD undertone (ICE spot dollar index last 88.67 versus 89.10 early Tuesday) and Japan's export sales. But USD sentiment is soothed by the stronger-than-expected rise in the USA NFIB index of small business optimism to 98.1 in November from 96.1 in October (versus the forecast of 96.5) and a bigger-than-expected 0.4% increase in the USA October wholesale inventories (versus the forecast of +0.3%), the rise in the USA IBD/TIPP economic optimism index to 48.4 in December from 46.4 in November. USD/JPY losses are also tempered by the demand from the Japanese import and Bank of Japan's large-scale monetary easing policy.

Technical comment:
The daily chart is tilting negative as the MACD histogram bars are turned negative, stochastics is falling from overbought levels, bearish parabolic stop-and-reverse signal was hit on Tuesday.

Trading recommendations:
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 positions are recommended with the first target at 117.90. A break of this target will move the pair further downwards to 117.40. The pivot point stands at 119.55. In case the price moves in the opposite direction and bounces back from the support level, then it will move 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 120.10 and the second target at 120.50.

Resistance levels:
120.10
120.50
120.75

Support levels:
117.90
117.40
117