Overview:
USD/JPY is forecasted to trade in lower range, undermined by profit-taking on the yen shorts as caution prevails while G-20 members meet in Moscow today and Saturday. USD/JPY is also weighed by unwinding of JPY-funded carry trades amid diminished investor risk appetite as global growth concerns rise after Japan's fourth-quarter gross domestic product unexpectedly shrank 0.1% on quarter and euro-zone fourth-quarter GDP contracted a more-than-expected 0.6%, Japan exports sales, positions adjustment before U.S. long weekend (U.S. markets will close for Presidents' Day Monday). But risk sentiment soothed by lower-than-expected U.S. weekly jobless claims of 341,000 (versus 360,000 forecast). USD/JPY losses are also tempered by demand from Japan importers and investment trusts, aggressive Bank of Japan monetary easing policy to achieve 2% inflation target. USD/JPY daily chart is negatively biased as stochastics is falling from overbought area, MACD staged bearish crossover against its exponential moving average, bearish parabolic stop-and-reverse signal hit at 92.76 Thursday.
Preference:
Sell below 92.9 with targets at 92.1 and 91.75 in extension.
Support Levels:
S1 - 92.1
S2 - 91.75
S3 - 91.61 (Feb. 1 low)
Alternative scenario:
Buy above 92.9. Above 92.9 look for further upside with 93.6 and 93.85 as targets.
Resistance Levels:
R1 - 93.6
R2 - 93.85
R3 - 94.41-94.46 (Tuesday's high-Monday's two-and-a-half year high)
Technical Comment:
Technically, the RSI is below its neutrality area at 50.
