Overview:
USD/JPY is trading with bearish bias. The rate is undermined by negative USD sentiment as influence from U.S. jobs data Friday lingers - U.S. unemployment rate of 7.8% for December has eased concerns that Federal Reserve's quantitative easing program might end earlier than expected this year. USD/JPY is also weighed by Japan exporter sales; profit-taking on yen-shorts. But USD/JPY losses tempered by demand from Japan importers; expectations that Bank of Japan will take aggressive easing action to boost the nation's economy and tackle deflation --Japanese PM Abe had declared his government would consider changing the law governing the BOJ if the central bank does not set an inflation target of 2% voluntarily at its next policy meeting. USD/JPY daily chart is still positive-biased as MACD is bullish, stochastic stays elevated at overbought, 5- & 15-day moving averages are rising.
Preference:
Sell below 87.8 with first target at 87.1 and second target 86.7 in extension.
Support Level:
S1 - 87.1 (Friday's low)
S2 - 86.77 (Thursday's low)
S3 - 86.54 (Wednesday's low)
Alternative scenario:
Buy above 87.8 . Above 87.8 look for further upside with 88.05 and 88.35 as targets.
Resistance Levels:
R1 - 88.05
R2 - 88.38-88.48 band (Monday's high-Friday's 29-month high)
R2 - 88.7
Technical Comment:
The pair remains under pressure and is challenging its support.
