Overview:
USD/JPY is trading in higher range. The rate is underpinned by positive USD sentiment as surprise rise in U.S. ISM-Chicago PMI to 11-month high of 56.8 in February from January's 55.6 (defying forecast for drop to 54.5), and lower-than-expected U.S. weekly jobless claims (came in at 344,000 vs. 365,000 forecast) overshadowed smaller-than-expected revision of U.S. 4Q GDP to 0.1% expansion (+0.5% forecast) from initial estimate of 0.1% contraction. USD/JPY is also buoyed by demand from Japan importers and investment trusts; confirmation of Haruhiko Kuroda's nomination as new BOJ governor which bolster expectations of further monetary easing from Japan's central bank. But USD/JPY gains tempered by Japan exporter sales; selling of yen crosses amid negative risk appetite (VIX fear gauge rose 5.3% to 15.51; S&P eased 0.09%; DJIA off 0.15% overnight) on news U.S. lawmakers failed to reach last-minute deal to avoid the $85 billion in automatic government spending cuts taking effect today as part of $1.2 trillion sequestration; positions adjustment before weekend. Yen crosses are vulnerable to 01:00 GMT February CFLP China final manufacturing PMI and 01:45 GMT February HSBC China final manufacturing PMI data.
Data focus:
13:30 GMT U.S. January personal income and outlays
14:00 GMT U.S. February Markit manufacturing PMI
14:55 GMT U.S. February University of Michigan survey of consumers (final)
15:00 GMT U.S. January construction spending
15:00 GMT U.S. February ISM manufacturing PMI.
Recommendation:
Buy above 92.50 with target 93.14 breach of which would target 93.45.
Resistance levels:
R1 - 93.14
R2 - 93.45
R3 - 93.75.
Alternative scenario:
If the price moves below to the pivot point of 92.50, then look for downward movement towards 92.08 and below that 91.75.
Support levels:
S1 - 92.08 (Thursday's low)
S2 - 91.75
S3 - 91.55
Technical comment:
Daily chart is mixed as MACD is bearish, but stochastics is turning bullish.