Fundamental Overview: USD/JPY is expected to consolidate with bullish bias after hitting almost an eight-year high of 123.33 on Tuesday. USD/JPY is underpinned by the positive dollar sentiment (ICE spot dollar index last 97.24 versus 96.45 early Tuesday) on stronger-than-expected US May CB consumer confidence of 95.4 (versus forecast 95.0), larger-than-expected increase of 6.7% in the US April new home sales to 517,000 (forecast +6.0% to 510,000), and upward revision of the US March durable goods orders from +4.4% to +5.1%. The pair is also boosted by continued impact from Fed Chair Yellen's comments that the central bank was on track to raise interest rates this year. USD/JPY is also supported by the demand from Japan's importers and the ultra-loose monetary policy of the Bank of Japan's. But USD/JPY gains are tempered by the Japanese exports and lower US Treasury yields (10-year fell to 2.142% from 2.229%), flows to the safe-haven yen amid increased risk aversion (VIX fear gauge rose 15.91% to 14.06; S&P 500 closed 1.03% lower at 2,104.2 overnight) as worries mount that Greece will be unable to pay back loans to the International Monetary Fund due next month.

Technical comment: The daily chart is positive-biased as the MACD is bullish, stochastics stays elevated at overbought levels, 5 and 15-day moving averages are advancing.

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 124.15 and the second target at 124.40. In the alternative scenario, short positions are recommended with the first target at 122.45 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 121.70. The pivot point is at 122.85.

Resistance levels: 124.15 124.40 124.75

Support levels: 122.45 121.70 121.35