Overview:

USD/JPY is expected to consolidate after hitting its one-week low at 101.72 on Thursday. It is underpinned by the yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 2.16% to 14.04; S&P rose 0.49% overnight) as Fed Chairwoman Janet Yellen in her testimony before U.S. Senate Banking Committee said harsh weather has played a role in recent "soft data," although she isn't sure to what extent, but added that the Fed might consider a pause in its reduction of bond buying if the weakness persists, while U.S. durable goods orders fell smaller-than-expected 1.0% in January (versus forecast 2.0% drop). USD/JPY is also supported by the demand from the Japanese importers and expansionary Bank of Japan's monetary policy. But risk appetite is dented by the persistent uncertainty about China's yuan policy and concerns about possible Russian military intervention in Ukraine. USD/JPY gains are also tempered by Japan the exporter sales, lower U.S. Treasury yields and weaker dollar sentiment (ICE spot dollar index last 80.28 versus 80.43 early Thursday) on larger-than-expected 14,000 rise in U.S. jobless claims to 348,000 in week ended Feb. 22 (versus 335,000 forecast), fall in Kansas City Fed's manufacturing composite index to +4 in February from +5 in January; positions adjustment before weekend.

Technical сomment:
Daily chart is mixed as MACD is bullish, but stochastics is in bearish mode.

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 101.65. A breach of this target will move the pair further downwards to 101.35. The pivot point stands at 102.25. In case the price moves in the opposite direction, bounces back from support level, and then 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 102.50 and the second target at 102.75.

Resistance levels:
102.45
102.75
103.05

Support levels:
101.6
101.35
101