Overview:

USD/JPY is expected to consolidate after hitting a 3-week low at 101.32 on Friday. It is underpinned by the improved dollar sentiment (ICE spot dollar index last 79.60 versus 79.40 early Friday) on better-than-expected U.S. April preliminary University of Michigan consumer sentiment index of 82.06 (versus 81.0 forecast) and higher-than-expected 0.5% rise in U.S. March PPI (versus +0.1% forecast). USD/JPY is also supported by the demand from Japan importers. But USD/JPY gains are tempered by the Japan exporter sales, lower U.S. Treasury yields, dovish Federal Reserve policy stance, flows to haven JPY and unwinding of JPY-funded carry trades amid weaker risk appetite (VIX fear gauge rose 7.17% to 17.03) as U.S. stocks fell Friday (S&P dropped 0.95) and worries fester over the situation in Ukraine and diminished expectations of further easing from the Bank of Japan.

Technical сomment:
Daily chart is still negative-biased as MACD and stochastics are bearish, although the latter is at oversold zone, five-day moving average is below 15-day MA and is declining.

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 101.45. A breach of this target will move the pair further downwards to 10120. The pivot point stands at 102.30. In case the price moves in the opposite direction and bounces back from 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 102.65 and the second target at 103.

Resistance levels:
102.65
103
103.25

Support levels:
101.45
101.20
100.80