FX.co ★ USD/JPY: Supported By Rising Trendline

Overview:
USD/JPY consolidated after hitting six-day high of 82.75 on Friday. The pair is undermined by selling of yen crosses amid diminished investor risk appetite (VIX fear gauge rose 5.38% to 15.87, U.S. stocks closed narrowly mixed Friday with S&P up 0.02%, Nasdaq down 0.06%) as worries over U.S. fiscal cliff rise after House Speaker John Boehner said budget talks between the White House and Congress were at a "stalemate" Friday; 0.2% fall in U.S. consumer spending in October (vs. forecast for no change), while incomes came in flat (vs. + 0.2% forecast). USD/JPY is also weighed by Japan exporter sales. But risk sentiment soothed as U.S. ISM-Chicago PMI for November rose to 50.4 from October's 49.9; while China's official manufacturing PMI rose to 50.6 in November from 50.2 in October (though below 50.8 forecast). USD/JPY upside is also limited by demand from Japan importers; expectations that opposition Liberal Democratic Party will win mid-December elections and push for aggressive monetary easing. Yen crosses are vulnerable to 01:45 GMT November HSBC final China manufacturing PMI data.
Preference:
Buy above 81.9 with targets 82.7 and 82.85 in extension.
Resistance Levels:
R1 - 82.75-82.84 (Friday's high-Nov. 22 high)
R2 - 82.85
R3 - 83.00
Alternative scenario:
Sell below 81.9 . Below 81.9 look for further downside with 81.65 & 81.4 as targets.
Support Levels:
S1 - 81.68-81.65 (Wednesday's low-Nov. 21 low)
S2 - 81.4
S3 - 81.13-81.08 (Nov. 20 low-Nov. 19 low)
Technical Comment:
Even though a continuation of the consolidation cannot be ruled out, its extent should be limited. USD/JPY daily chart is mixed as MACD is bullish; but stochastic is bearish at overbought.