Overview:
USD/JPY continues to range trade. The rate is undermined by selling of yen crosses amid higher risk aversion (VIX fear gauge rose 2.71% to 15.92; S&P fell 0.52% overnight) as worries increase over U.S. fiscal cliff after Senate Majority Leader Harry Reid said there has been "little progress" in U.S. budget negotiations; OECD lowering its 2013 growth forecast for the U.S. to 2%, from 2.6%, and now expects the euro zone to contract by 0.1%, instead of growing by 0.9%; Japan exporter sales. But USD/JPY downside is limited by demand from Japan importers; expectations that opposition Liberal Democratic Party will win mid-December elections and introduce aggressive monetary easing; improved USD sentiment after raft of positive U.S. economic reports: Richmond Fed manufacturing current business conditions index rose to 9 this month from minus 7 in October; U.S. durable goods orders came in unchanged for October, against forecast for 1.2% decline; S&P Case-Shiller 20-city home prices index rose 3% on year during September, adding to signs of a U.S. housing-market recovery; U.S. Conference Board consumer confidence index rose to 73.7 in November from 73.1 in October, defying forecast for fall to 72.2.
Preference:
Sell below 82.25 with 81.55 and 81.25 as next targets.
Support Levels:
S1 - 81.55
S2 - 81.25
S3 - 81.13-81.08 (Nov. 20 low-Nov. 19 low)
Alternative scenario:
Buy above 82.25. The upside penetration of 82.25 will call for a rebound towards 82.6 and 82.85.
Resistance Levels:
R1 - 82.63 (Monday's high)
R2 - 82.84 (Thursday's seven-and-a-half month high)
R3 - 83.00
Techncial Comment:
The pair has broken below its support and remains under pressure. USD/JPY daily chart is mixed as MACD is bullish; but stochastics is bearish at overbought.
