Overview:

USD/JPY is expected to trade in a higher range. It is underpinned by the yen-funded carry trades amid positive investor risk sentiment (VIX fear gauge eased 9.77% to 14.23; S&P 500 rose 0.28% to close at 1,936.92 overnight) on waning worries over conflict in Ukraine, Iraq and Gaza--although investors remain cautious over the geopolitical risks--and optimism on China's economic prospects as benign inflation data (CPI rose 2.3% on-year in July, same pace as in June) gives room for the People's Bank of China to maintain loose monetary policy. USD/JPY is also supported by the demand from Japan importers and higher U.S. Treasury yields (10-year yield last 2.429% versus 2.415% late Friday) and broadly firmer dollar undertone (ICE spot dollar index last 81.47 versus 81.42 early Monday). But USD/JPY gains are tempered by the Japan exporter sales.

Technical comment:
Daily chart is mixed as stochastics is neutral, five-day moving average is falling below 15-day MA.

Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 102.45 and the second target at 102.75. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.40. A break of this target would push the pair further downwards and one may expect the second target at 101.15. The pivot point is at 101.95.

Resistance levels:
102.45
102.75
103

Support levels:
101.40
101.15
100.75