FX.co ★ USD/JPY: Bullish Bias Above 81.9

Overview:
USD/JPY is consolidating with risks skewed lower after hitting four-day low of 81.71 on Tuesday. The rate is undermined by negative USD sentiment on worries over U.S. fiscal cliff as budget negotiations showing no sign of progress - President Obama said on Tuesday latest Republican budget proposal remains "out of balance," and on prospects that U.S. Federal Reserve may embark on more purchases of longer-dated Treasury bonds at next week's monetary-policy meeting. USD/JPY is also weighed by Japan exporter sales. But USD sentiment is soothed by rebound in U.S. ISM-NY Current Business Conditions index to 52.5 in November from 12-month low of 45.9 in October. USD/JPY losses also tempered 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 China November services PMI data.
Preference:
Buy above 81.9 with targets 82.35 and 82.55 in extension.
Resistance Levels :
R1 - 82.35
R2 - 82.50 (Monday's high)
R3 - 82.75-82.84 (Friday's high-Nov. 22 high)
Alternative scenario:
Sell below 81.9. Below 81.9 look for further downside with 81.65 and 81.4 as targets.
Support Levels:
S1 - 81.71-81.65 (Tuesday's low-Nov. 21 low)
S2 - 81.4
S3 - 81.13-81.08 (Nov. 20 low-Nov. 19 low)
Technical Comment:
The break above 81.9 is a positive signal that a path to 82.35 has opened. USD/JPY daily cgart is negative-biased as MACD and stochastic are in bearish mode.