Overview:

USD/JPY is expected to trade in a lower range. Liquidity is thin today as financial markets in the U.S. and Canada are shut for holiday. USD/JPY is undermined by the negative U.S. dollar sentiment (ICE spot dollar index last 80.10 versus 80.30 early Friday) after surprise 0.3% drop in the U.S. January industrial production (versus forecast 0.3% increase) and weaker-than-expected U.S. January capacity utilization of 78.5% (versus 79.3% forecast). USD/JPY is also weighed by the Japanese exports sales. But USD/JPY downside is limited by the demand from Japan's importers and ultra-loose Bank of Japan's monetary policy stance and yen-funded carry trades amid positive risk appetite (VIX fear gauge eased 4.03% to 13.57; S&P gained 0.48% Friday) after University of Michigan preliminary February consumer sentiment index came in better than expected at 81.2 (versus 80.0 forecast).

Technical сomment:
Daily chart is negative-biased as MACD and stochastics are turning bearish.

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 101.5 in mind. A breach of this target will move the pair further downwards to 101.2. The pivot point stands at 102.15. In case the price moves in the opposite direction, bounces back from support level, and then moves above its pivot point, it is most favourably expected to move further to the upside. In that scenario, a long position is recommended with the first target at 102.4 and the second target at 102.7.

Resistance levels:
102.4
102.7
102.95

Support levels:
101.5
101.2
100.75