USD/JPY is expected to trade in a lower range. It is undermined by the negative dollar sentiment (ICE spot dollar index last 94.22 versus 94.95 early Wednesday) after the US Federal Reserve cut its economic growth outlook and hinted at a slow approach to raising interest rates. USD/JPY is also weighed by the lower shorter-dated US Treasury yields (2-year fell 3.7 bps to 0.653% Wednesday) and Japan's exports. But USD/JPY losses are tempered by the demand from the Japanese importers, the Bank of Japan's ultra-loose monetary policy, and reduced safe-haven appeal of the yen as global risk sentiment improves (VIX fear gauge eased 2.09% to 14.5; S&P 500 closed up 0.2% at 2,100.44 overnight) after the Fed's dovish statement.

Technical comment:

The daily chart is negative-biased as the MACD and stochastics are bearish.

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 122.45. A break of that target will move the pair further downwards to 122.15. The pivot point stands at 123.35. 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 move further to the upside. According to that scenario, long positions are recommended with the first target at 123.70 and the second target at 124.10.

Resistance levels: 123.70 124.10 124.35

Support levels: 122.45 122.15 121.75