Overview:
USD/JPY is trading with bullish bias after hitting near-four-year high of 99.63 this morning. USD/JPY is supported by weak yen sentiment as last week's more-aggressive-than-expected monetary easing measures from Bank of Japan continue to reverberate. USD/JPY is also buoyed by yen-funded carry trades amid positive risk sentiment (VIX fear gauge eased 5.24% to 13.19; S&P up 0.63% overnight) as investors remain confident that Federal Reserve will keep its stimulus programs in place after Friday's disappointing U.S. March jobs report; Alcoa kicked off U.S. 1Q corporate earnings-reporting season after U.S. close with above-forecast 59% profit increase; demand from Japan importers, life insurers and investment trusts; geopolitical tensions on Korean Peninsula. But USD/JPY gains tempered by Japan exporter sales. Yen crosses are vulnerable to 01:30 GMT China March CPI, PPI data. Daily chart is positive-biased as MACD and stochastics are bullish; five-day moving average is above 15-day MA and rising.
Recommendation:
Buy above 98 with upside targets at 100 and 100.7.
Resistance levels:
R1 - 100.1
R2 - 100.7
R3 - 101.45 (April 6, 2009 swing high)
Alternative scenario:
Sell below 98 with downside targets at 97.2 and 96.6.
Support levels:
S1 - 97.2
S2 - 96.6
S3 - 96.3
