Overview:

USD/JPY is expected to consolidate in a lower range after hitting a three-and-a-half month low at 101.10 on Monday. It is underpinned by the yen-funded carry trades amid improved risk sentiment (VIX fear gauge eased 0.16% to 12.42) as Wall Street rose overnight for the second straight session (S&P 500 gained 0.38%). USD/JPY is also supported by the demand from Japan importers, higher longer-dated U.S. Treasury interest rates as the yield curve steepened. But USD/JPY gains are tempered by the Japan exporter sales and concerns over China's economy amid fresh signs that the Chinese property market is cooling and new rules aimed at limiting Chinese banks' off-balance-sheet lending activities. Daily chart is mixed as MACD is bearish, five and 15-day moving averages are declining; but stochastics is turning bullish at oversold zone.

Technical сomment:
Daily chart is mixed as MACD is bearish, five and 15-day moving averages are declining; but stochastics is turning bullish at oversold zone.

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 101.05. A breach of this target will move the pair further downwards to 100.75. The pivot point stands at 101.55. 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 101.70 and the second target at 101.90.

Resistance levels:
101.70
101.90
102.35

Support levels:
101.05
100.75
100.45