Overview:
USD/JPY is to trade in a higher range. USD/JPY is undermined by comments from G-7 official that the group is concerned about Japan's unilateral guidance on the yen, and that Japan will be in the spotlight at G-20 meeting of finance ministers and central bankers in Moscow this weekend. USD/JPY is also weighed by weaker USD sentiment after G-7 statement, and lower-than-expected U.S. January NFIB index of small business optimism (rose to 88.9 from 88 in December, well below 89.5 forecast), and Japan export sales. But USD/JPY losses are tempered by Bank of Japan's aggressive monetary easing policy, demand from Japan importers and investment trusts. USD/JPY daily chart is still positivly biased as MACD is still in bullish mode, stochastics stays elevated at overbought; five- and 15-day moving averages are advancing.
Preference:
Buy above 92.9 with targets at 93.85 and 94.45 in extension.
Resistance Levels:
R1 - 93.85
R2 - 94.45
R3 - 94.41-94.46 (Tuesday's high-Monday's two-and-a-half year high)
Alternative scenario:
Sell below 92.9. Below 92.9 look for further downside with 92.1 and 91.4 as targets.
Support Levels:
S1 - 92.17 (Friday's low)
S2 - 91.4
S3 - 91
Technical Comment:
The RSI is bullish and calls for further upside.
