Overview:

USD/JPY is expected to trade in higher range.It is underpinned by the yen-funded funded carry trades amid positive risk appetite (S&P 500 closed up 0.24% overnight at 1,892.49) on upbeat HSBC flash China May manufacturing PMI data suggesting growth stabilization in the world's second-largest economy, continued impact from FOMC meeting minutes which were released on Wednesday indicating that the Federal Reserve is in no hurry to raise interest rates, rise in Markit flash U.S. May manufacturing PMI to 56.2 from final April reading of 55.4, improvement in Kansas City Fed manufacturing composite index to 10 in May from 7 in April. But risk sentiment dented by larger-than-expected 28,000 increase in U.S. jobless claims to 326,000 in the week ended May 17 (versus 310,000 forecast), weaker-than-expected 1.3% increase in U.S. April existing home sales to 4.65 million (versus forecast 2.0% rise to 4.68 million), drop in Chicago Fed National Activity Index to -0.32 in April from +0.34 in March, and weaker-than-expected 0.4% rise in the U.S. Conference Board April leading index (versus +0.5% forecast). USD/JPY is also supported by the demand from Japan importers, higher U.S. Treasury yields and broadly firmer USD undertone (ICE spot dollar index last 80.22 versus 80.07 early Thursday). But USD/JPY gains are tempered by the Japan exporter sales and positions adjustment before U.S. long weekend (financial markets in U.S. are shut for public holiday on Monday).

Data focus:
1400 GMT U.S. April new home sales.

Technical сomment:
Daily chart is mixed as MACD is bearish, but stochastics is rising from oversold zone.

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 101.90 and the second target at 102.10. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.20. A breach of this target will push the pair further downwards and one may expect the second target at 101.05. The pivot point is at 101.50.

Resistance levels:
101.90
102.10
102.45

Support levels:
101.20
101.05
100.75