Overview:
USD/JPY is consolidating with bullish bias after hitting eight-and-a-half-month high of 83.67 on Thursday. The rate is underpinned by negative JPY sentiment amid expectations that opposition Liberal Democratic Party would win Sunday's parliamentary elections and push for aggressive monetary easing and further JPY weakness. USD/JPY is also supported by demand from Japan importers and investment trusts. But USD/JPY gains tempered by Japan exporter sales; higher risk aversion (VIX fear gauge rose 3.82% to 16.56, S&P fell 0.63% overnight) as concerns over little progress made in U.S. lawmakers' debt negotiations to avert the fiscal cliff, and lower-than-expected 0.3% rise in U.S. November retail sales (vs. +0.5% forecast) overshadowed bigger-than-expected drop in latest U.S. weekly jobless claims to 343,000 (vs. 367,000 forecast). USD/JPY upside is also limited by positions adjustment before weekend. Yen crosses vulnerable to 01:45 GMT December HSBC China flash manufacturing PMI data.
Data focus:
2350 GMT Japan 4Q Tankan survey of enterprises
1330 GMT U.S. November CPI
1400 GMT U.S. December flash manufacturing PMI
1415 GMT U.S. November industrial production and capacity utilization.
Preference:
Long positions above 83.45 with targets at 83.95 and 84.2 in extension.
Resistance Levels:
R1 - 83.95
R2 - 84.17 (March 15 top)
R3 - 84.35
Alternative scenario:
Below 83.45 look for further downside with 83.2 and 82.9 as targets.
Support Levels:
83.2
82.9
82.49 (Wednesday's low)
Technical Comment:
The pair is pulling back on its support ahead of further advance.USD/JPY daily chart is positive-biased as MACD and stochastic is bullish; five- & 15-day moving averages are rising.
