Overview:
USD/JPY is consolidating with bullish bias after hitting three-and-a-half month high of 79.96 on Monday. The rate is underpinned by weak JPY sentiment as expectations rise for further monetary easing from Bank of Japan at its Oct. 30 meeting after wider-than-expected Japan September trade deficit and BOJ's downgrade of its economic outlook for eight out of Japan's nine regions in October. USD/JPY is also supported by widening USD-JPY interest differentials; demand from Japan importers and investment trusts; diminished investor risk aversion (VIX fear gauge eased 2.58% to 16.62) as DJIA erased triple-digit losses to close up 0.02% overnight. But USD/JPY gains tempered by Japan exporter sales; and concerns about U.S. "fiscal cliff" that could throw the U.S. economy back into recession; caution ahead of tomorrow's U.S. FOMC monetary announcement as traders wait to see if the Federal Reserve changes the guidance it gives markets about interest rates.
Preference:
Buy above 79.65 with first target 80.1 and if it exceeds further, than second target is 80.35.
Resistance Levels:
R1 - 80.00-80.09 (psychological level-July 5 high)
R2 - 80.35
R3 - 80.63 (June 25 high)   
Alternative scenario:
If price crosses below the pivot point 79.65, look for further downside with 79.4 and 79.1 as targets.
Support Levels:
S1 - 79.4
S2 - 79.14 (Friday's low)
S3 - 78.91 (Thursday's low)  
Technical Comment: 
Even though a continuation of the consolidation cannot be ruled out, its extent should be limited. USD/JPY daily chart is positive-biased as MACD is bullish, while stochastics stays elevated at overbought; five-day moving average is above 15-day MA and rising.