FX.co ★ USD/JPY: Technical Analysis

Overview:

USD/JPY is consolidating after hitting two-week high of 78.88 on Friday. Liquidity thins in Asia as Japan markets closed for holiday. USD/JPY is underpinned by positive USD Sentiment after U.S. September unemployment rate unexpectedly dipped to 7.8% from 8.1% (vs. forecast for no change), the lowest jobless rate since January 2009. The pair rate was also influenced by higher U.S. Treasury yields as well as sell-yen orders from Japan importers. But USD/JPY is limited to the upside by buy-yen orders from Japan exporters. We can suggest selling of yen crosses as risk appetite decreases amid renewed concerns about Europe's debt problems. We do not expect any major U.S. data for today as the U.S. bond market is closed for Columbus Day holiday.

Preference:
Short positions below 78.65 with targets at 78.05.

Support Levels:
78.27 (Friday's low),
78.05 (Wednesday's low),
77.97 (Tuesday's low),
77.79 (Oct. 1 low).

Alternative scenario:
Above 78.65 look for further upside with 78.85 and 79 as targets.

Resistance Levels:
78.88 (Friday's high)
79 *** intraday resistance
79.23-79.32(Sept. 19 high-200-day moving average)
79.66 (Aug. 20 reaction high).

Comment:
The pair is under pressure and is approaching its new support.