Overview:
USD/JPY- to trade with risks skewed higher. Liquidity is low as Japan markets shut for Emperor's Birthday Holiday, while markets in Australia, New Zealand and several Western countries including U.K. and U.S. will shut early for Christmas Eve. USD/JPY underpinned by negative JPY sentiment after Prime Minister-elect Shinzo Abe Sunday repeated calls for the Bank of Japan to set a 2% target for price inflation at its January policy-board meeting and threatened to revise legislation to force the bank's hand if it doesn't act on its own, while suggesting a USD/JPY level of around 90 yen would help Japan's exporters. USD/JPY also supported by sell-yen orders from Japan importers. But USD/JPY gains tempered by buy-yen orders from Japan exporters; impasse in U.S. budget negotiations raises worries that Washington lawmakers may be unable to avert the fiscal cliff of automatic spending cuts and tax increases due to kick in next year.
Preference:
Buy above 84.2 with targets 84.6 and 84.9.
Resistance Levels:
84.62 (Wednesday's 20-month high)
84.9
85.53 (April 6, 2011, swing high)
Alternative scenario:
Sell below 84.2. The downside penetration of 84.2 will call for 83.85 and 83.6.
Support Levels:
83.85-83.82 (Friday's low-Tuesday's low)
83.61 (Dec. 17 low)
83.32 (Dec. 14 low)
Technical Comment:
The break above 84.2 is a positive signal that has opened a path to 84.9. USD/JPY daily chart positive-biased as MACD bullish, stochastics stays elevated at overbought, five- and 15-day moving averages are rising.
The material has been provided by Instaforex Company - instaforex.com