Overview:
USD/JPY is consolidating in lower ranges after edging up this morning to three-day high of 79.65 on JPY sales versus the Aussie and the Kiwi, as recent stronger-than-expected Chinese data reduced fears over China economic slowdown and boost outlook for commodity-linked currencies. USD/JPY is also supported by demand from Japan importers. But USD/JPY upside is limited by subdued risk appetite as concerns persist over U.S. fiscal cliff dilemma; and uncertainty whether euro-zone lenders will decide to release latest tranche of bail-out funds to Greece.
Preference:
Sell below 79.6 with targets 79.05 and 78.85 in extension.
Support Levels:
S1 - 79.07 (Friday's low)
S2 - 78.84-78.81 (100-day moving average - 55-day moving average)
S3 - 78.59 (Oct. 17 low)
Alternative scenario:
Buy above 79.6. Above 79.6 look for further upside with 79.8 and 80.1 as targets.
Resistance Levels:
R1 - 79.8
R2 - 80.03 (Thursday's high)
R3 - 80.41-80.45 (Wednesday's high-Nov. 6 high)
Technical Comment:
The RSI is badly directed. USD/JPY daily chart is negative-biased as MACD and stochastics are bearish; five-day moving average is below 15-day MA and falling.