USD/JPY is expected to consolidate with bearish bias after hitting the five-week low of 122.11 on Monday. It is undermined by the flows to the safe-haven yen amid increased risk aversion (VIX fear gauge surged 34.45% to 18.85, S&P 500 closed 2.09% lower at 2,057.64.4 overnight) as Greece confirmed it would get into default on a EUR1.55 billion repayment to the International Monetary Fund, and increased prospects for Greece to exit the European Union. USD/JPY is also weighed by the weaker dollar sentiment (ICE spot dollar index last 94.99 versus 96.20 early Monday) as market participants pushed back the expectations for the US Federal Reserve to increase its interest rates this year in view of latest developments in the Greek debt crisis abd smaller-than-expected 0.9% increase in the US pending home sales index to 112.6 in May (versus forecast +1.2%), lower US Treasury yields (10-year fell 14.8 bps to 2.327% Monday), and Japan's exports. But USD sentiment is soothed by the stronger-than-expected US June Dallas Fed business activity index of -7.0 (versus forecast -18.0). USD/JPY losses are also tempered by the demand from the Japanese importers and the Bank of Japan's ultra-loose monetary policy.

Technical comment:

The daily chart is negative-biased as the MACD and stochastics are bearish.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 121.70. A break of that target will move the pair further downwards to 121.40. The pivot point stands at 122.70. 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 123.20 and the second target at 124.

Resistance levels: 123.20 124 124.45

Support levels: 121.70 121.40 121