Overview:
USD/JPY has consolidated with bullish bias after hitting 28-month high of 89.5. USD/JPY is supported after U.S. Senate voted overwhelming 89-8 to clear deal to avoid the fiscal cliff. USD/JPY is also buoyed by the better than expected household data and also better than expected initial jobless claims. USD/JPY topside is also limited by profit-taking on yen-shorts; buy-yen orders from Japan exporters. USDJPY daily chart is bullish, MACD and Stochastic are showing bullish signals where RSI is above its neutrally area at 70.71. It is recommended to take long positions above 88.75.
Preference:
Buy above 88.75 with targets at 89.65 and 90 in extension.
Alternative scenario:
Sell below 88.75. Below 88.75 look for further downside with 88.3 and 87.95 as targets.
Technical Comment:
The pair remains on the upside and is approaching its next resistance.
