Overview:

USD/JPY is expected to trade in a lower range. It is undermined by the flows to haven JPY and unfolding JPY-based trades amid increasing risk aversion (VIX fear gauge rose 11.57% to 16.87, S&P 500 closed 0.97% lower at 1,920.21 overnight) as concerns rise over the situation in Ukraine and the health of the global economy after the HSBC China services PMI dropped to survey-record low of 50.0 in July from 53.1 in June, while speculation is renewed for an earlier-than-forecast rise in U.S. interest rates after stronger-than-expected rise in U.S. ISM non-manufacturing PMI to eight-year high of 58.7 in July from 56.0 in June (versus forecast 56.5) and larger-than-expected 1.1% increase in U.S. June factory orders (versus forecast +0.5%). USD/JPY also weighed by Japanese export sales. But USD/JPY losses are tempered by the demand from Japanese importers, the positive dollar sentiment (ICE spot dollar index last 81.53 versus 81.31 early Tuesday) on the strong U.S. ISM non-manufacturing PMI and factory orders data.

Technical comment:
The daily chart is mixed as MACD is bullish, but stochastics is bearish in the overbought zone.

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 position is recommended with the first target at 102.15. A break of this target will move the pair further downwards to 102. The pivot point stands at 102.65. In case the price moves in the opposite direction and bounces back from the support level, then it will 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 102.75 and the second target at 103.

Resistance levels:
102.75
103
103.40

Support levels:
102.15
102
101.75