Overview:

USD/JPY is expected to consolidate with the bearish bias after hitting one-week low at 101.47 this morning as markets are awaiting the FOMC meeting minutes at 1800 GMT. Market participants would be looking for any hints of a more hawkish tone after the recent strong employment data, although the general view is that the recent improvement in the job market is not enough to cause the Federal Reserve to deviate from its current policy path. USD/JPY is undermined by selling yen crosses amid increased risk aversion (VIX fear gauge rose 5.74% to 11.98) as U.S. stocks fell overnight (S&P 500 closed down 0.7% at 1,963.71) before the start of the U.S. 2Q corporate-earnings season. USD/JPY is also weighed by the weaker dollar sentiment (ICE spot dollar index last 80.17 versus 80.22 early Tuesday) on lower U.S. Treasury yields and a surprise drop in U.S. NFIB Index of Small Business Optimism to 95.0 in June from 96.6 in May (versus forecast for rise to 97.0) as well as Japanese export sales. But USD/JPY losses are tempered by the demand from Japanese importers.

Technical comment:
The daily chart is negative-biased as stochastics is in bearish mode, MACD is 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 101.35. A breach of this target will move the pair further downwards to 101.20. The pivot point stands at 101.80. In case the price moves in the opposite direction and bounces back from the support level, it would 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 and the second target at 102.25.

Resistance levels:
102
102.25
102.50

Support levels:
101.35
101.20
101