USD/JPY is expected to consolidate after hitting the six-week low of 121.72 on Monday. It is undermined by the flows to the safe-haven yen amid diminished investor risk appetite (VIX fear gauge rose 1.31% to 17.01, S&P 500 closed 0.39% lower at 2,068.76 overnight) as fears mount over eventual Greece's exit from the eurozone. Sunday's referendum showed 61.3% of Greek voters rejected austerity terms demanded by creditors in exchange for further aid. Monday's sell-offs in many riskier assets were not as large as many investors had feared. USD/JPY is also weighed by the lower US Treasury yields (10-year fell 10.0 bps to 2.290% Monday) and Japan's exports. But USD/JPY downside is limited by the demand from the Japanese importers and the Bank of Japan's ultra-loose monetary policy.

Technical comment:

The daily chart is still negative-biased as the MACD and stochastics are bearish, five and 15-day moving averages are declining.

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 122.80. A break of that target will move the pair further downwards to 121.40. The pivot point stands at 122.90. 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 mo ve further to the upside. According to that scenario, long positions are recommended with the first target at 123.35 and the second target at 123.70.

Resistance levels: 123.35 123.70 124

Support levels: 121.80 121.40 121