Overview:

USD/JPY is expected to trade in lower range. It is underpinned by the yen-funded carry trades amid positive investor risk sentiment (VIX fear gauge eased 3.07% to 14.23, S&P 500 hit all-time high of 1858.71 overnight before closing up 0.62% at 1847.61) on encouraging economic news out from Europe, while drop in Chicago Fed National Activity Index to -0.39 in January from -0.03 in December and fall in Dallas Fed's general business activity index to 0.3 in February from 3.8 in January were attributed to winter-related effects. USD/JPY is also supported by the higher U.S. Treasury yields, expansionary Bank of Japan's monetary policy and demand from Japan's importers. But USD/JPY gains are tempered by the weaker dollar sentiment (ICE spot dollar index last 80.21 versus 80.25 early Monday) on soft U.S. data and Japanese exporter sales. Daily chart is positive-biased as MACD and stochastics are bullish.

Technical сomment:
Daily chart still is positive-biased as the MACD and stochastics are in the bullish mode.

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 101.65. A breach of this target will move the pair further downwards to 101.35. The pivot point stands at 102.7. In case the price moves in the opposite direction, bounces back from support level, and then 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 103.05 and the second target at 103.40.

Resistance levels:
103.05
103.40
103.85

Support levels:
101.65
101.35
101