Overview:

USD/JPY is expected to trade in a range. It is supported by the positive dollar sentiment (ICE spot dollar index last 80.32 versus 80.27 early Tuesday) after stronger-than-expected rise in Conference Board U.S. consumer confidence index to 85.2 in June - highest since January 2008 from 82.2 in May (versus 83.5 forecast) and larger-than-expected 18.6% increase in U.S. new home sales to 504,000 in May (versus forecast +0.5% rise to 435,000). USD/JPY is also buoyed by demand from the Japanese importers. But USD/JPY gains are tempered by the Japan exporter sales, lower U.S. Treasury yields and selling of yen crosses amid increased risk aversion (VIX fear gauge rose 10.47% to 12.13, S&P 500 fell 0.64% overnight) as escalating violence in Iraq overshadowed upbeat U.S. data.

Technical comment:
Daily chart is mixed as MACD and stochastics are 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 101.60. A breach of this target will move the pair further downwards to 101.45. The pivot point stands at 101.85. In case the price moves in the opposite direction and bounces back from the 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 and the second target at 102.15.

Resistance levels:
102
102.15
102.30

Support levels:
101.60
101.45
101.15