Overview:
USD/JPY is to consolidate with bullish bias after hitting three-and-a-half year high of 95.10 Thursday, as markets wait 13:30 GMT for the U.S. February non-farm payrolls (expected to increase by 160,000) & unemployment rate (expected to improve to 7.8% from 7.9%). USD/JPY is underpinned by expectations of more monetary easing measures in coming months from Bank of Japan's incoming governor Haruhiko Kuroda to achieve 2% inflation target; yen-funded carry trades amid positive risk appetite (VIX fear gauge eased 3.47% to 13.06; S&P rose 0.18%, DJIA hits fresh record high overnight) as latest U.S. weekly jobless claims came in lower than expected at 340,000 (vs 350,000 forecast); higher U.S. Treasury yields; demand from Japan importers and investment trusts. But USD sentiment dented after wider-than-expected U.S. January trade deficit of $44.45 billion (vs $43 billion forecast). USD/JPY gains also tempered by Japan exporter sales; positions adjustment before weekend. Risk sentiment is vulnerable to China February trade balance data.
Recommendation:
Buy above pivot point at 94.75 and keep in sight the first target 95.52 and second target at 95.75
Resistance Levels:
R1 - 95.52
R2 - 95.75
R3 - 96
Alternative scenario:
Sell below 94.75 and look for further downside with targets at 94.3 and 94
Support Levels:
S1 - 94.3
S2 - 94
93.79 (Thursday's low)
Technical Comment:
Daily chart positive-biased as stochastics in bullish mode, MACD turning bullish; five-day moving average above 15-day MA and rising.
