Overview:
USD/JPY is trading in higher range. The rate is underpinned by reduced safe-haven appeal of yen and yen-funded carry trades amid improved global risk sentiment (VIX fear gauge eased 3.86% to 16.46; S&P rose 0.16% overnight) after surprise rise in U.S. ISM non-manufacturing composite index to 54.7 last month from 54.2 in October (vs. forecast for drop to 53.5), unexpected 0.8% increase in U.S. October factory orders (vs. forecast for 0.1% decline), better-than-expected U.S. 3Q non-farm productivity (came in at +2.9% vs. +2.8% forecast and initial estimate of +1.9%). USD/JPY is also supported by demand from Japan importers and investment trusts; expectations that opposition Liberal Democratic Party will win mid-December elections and push for aggressive monetary easing, while BOJ's deputy governor Nishimura said Wednesday Japanese economy remains vulnerable and reiterated that policy makers are prepared to take more decisive steps to stimulate growth. But USD/JPY gains tempered by Japan exporter sales; continued lack of progress in Washington toward resolving the fiscal cliff; positions adjustment as caution sets in ahead of tomorrow's U.S. November non-farm payrolls data.
Data focus:
13:30 GMT U.S. Dec. 1 weekly jobless claims.
Preference:
Buy above 82.35 with targets 82.55 and 82.75.
Resistance Levels:
R1 - 82.48-82.50 (Wednesday's high-Monday's high)
R2 - 82.75-82.84 (Friday's high-Nov. 22 high)
R3 - 83.00
Alternative scenario:
Sell below 82.25. The downside breakout of 82.25 will open the way to 82 and 81.65.
Support Levels:
S1 - 82
S2 - 81.71-81.68 (Tuesday's low-Nov. 28 low)
S3 - 81.4
Technical Comment:
The RSI is bullish and calls for further upside. USD/JPY daily chart is mixed as MACD and stochastic are in bearish mode; but five-day moving average is meandering sideways.