Overview:

USD/JPY is expected to trade in a higher range. It is underpinned by the yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 0.94% to 11.57, S&P 500 closed up 0.54% at all-time high 1,920.03 overnight) as larger-than-expected 27,000 drop in U.S. jobless claims to 300,000 in week ended May 24 (versus 319,000 forecast) overshadowed smaller-than-expected 0.4% on-month increase in U.S. April pending home sales index to 97.8 (versus +2.0% forecast), with investors brushing aside worse-than-expected downward revision in U.S. 1Q GDP growth to -1.0% from +0.1% (versus -0.6% forecast) due to harsh winter weather and inventories. USD/JPY is also supported by the demand from Japan importers and rebounding U.S. Treasury yields. But USD/JPY gains are tempered by the Japan exporter sales and positions adjustment before weekend. Daily chart is mixed as MACD is bullish, but stochastics is in bearish mode.

Technical Comment:
Daily chart is mixed as MACD is bullish, but stochastics is turning bearish.

Trading recommendation:
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 far as the price is above its pivot point, a long position is recommended with the first target at 102 and the second target at 102.35. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.40. A breach of this target will push the pair further downwards and one may expect the second target at 101.20. The pivot point is at 101.55.

Resistance levels:
102
102.35
102.55

Support levels:
101.40
101.20
101.05