Fundamental outlook:

USD/JPY is expected to consolidate after hitting a seven-day low of 118.58 on Wednesday. USD/JPY is undermined by negative dollar sentiment (ICE spot dollar index last 95.21 versus 96.10 early Wednesday) on the back of the US flash GDP weaker-than-expected 0.2% annual rate growth in the Q1 (versus forecast +1.0%). USD/JPY is also weighed by the flows to haven JPY amid decreased risk tolerance (VIX fear gauge rose 7.9% to 13.39, S&P 500 closed 0.37% lower at 2,106.85 overnight) due to weak US GDP data; Japan export sales. But USD sentiment is soothed after the statement from the Federal Reserve sounded more optimistic than expected (the central bank said some of the recent softness in the US economy reflected "transitory factors," although it offered investors little additional clarity on its course of rate increases). USD/JPY downside is also limited by demand from Japan importers, and higher US Treasury yields (10-year at 2.045% versus 1.973% late Tuesday).

Technical comment:
The daily chart is mixed as the MACD and stochastics are bearish, five-day moving average is below 15-day moving average and is declining; but bullish outside-day-range pattern was completed on Wednesday.

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 118.30. A break of that target will move the pair further downwards to 117.80. The pivot point stands at 119.35. 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 119.70 and the second target at 120.10.

Resistance levels:
119.70
120.10
120.45

Support levels:
118.30
117.80
117.40