Fundamental outlook:
USD/JPY is expected to trade with risks skewed lower. It is undermined by the flows to haven JPY amid increased risk aversion (VIX fear gauge rose 10.24% to 13.89, S&P 500 closed 1.13% lower at 2,081.18 Friday) as worries over Greece potentially defaulting mounted and exiting the eurozone, Late Friday, Chinese regulators announced that the fund managers would be allowed to lend shares for short selling and some margin trading would be banned. On Saturday, the China House Price Index fell 0.61% on-year in March for the seventh straight month, although the People's Bank of China soothed sentiment, as it announced on Sunday, a full percentage point cut in the reserve-requirement ratio to 18.5%. USD/JPY is also weighed by lower longer-dated US Treasury yields (10-year at 1.850% versus 1.878% late Thursday) and Japan export sales. But USD sentiment is soothed by the stronger-than-expected preliminary University of Michigan April consumer sentiment index of 95.9 (versus forecast 94.0). USD/JPY losses are also tempered by demand from Japan importers and ultra-loose Bank of Japan's monetary policy.

Technical comment:
The daily chart is negative-biased as the MACD and stochastics are bearish. Aalthough, the latter is at oversold levels, five-day moving average is below 15-day moving average and is declining.

Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 118.30. A break of that target will move the pair further downwards to 117.95. The pivot point stands at 119.30. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 119.50 and the second target at 120.05.

Resistance levels:
119.50
119.75
120.05
Support levels:
118.30
117.95
117.35