FX.co ★ USD/JPY: Under pressure

Overview:
USD/JPY is consolidating in lower range after hitting 31-month high of 91.26 on Monday. The rate is undermined by unwinding of JPY-funded carry trades amid reduced risk appetite (VIX fear gauge rose 5.28% to 13.57, S&P slipped 0.18% overnight) as surprise 4.3% drop in U.S. December pending-home-sales index to 101.7 in December (vs. forecast for 1.0% rise) outweighs bigger-than-expected 4.6% increase in U.S. December durable-goods orders (vs. +2.0% forecast), while caution sets in ahead of tomorrow's U.S. 4Q advance estimate GDP and FOMC policy announcement. USD/JPY is also weighed by Japan exporter sales. But USD/JPY losses tempered by demand from Japan importers; strong political pressure on Bank of Japan for further monetary easing as PM Abe Monday reminded central bank that it's now responsible for achieving 2% inflation, which would implicitly drive down the yen. USD/JPY daily chart is still positive-biased as MACD and stochastic are bullish; five- and 15-day moving averages are rising.
Preference:
Sell below 91 with targets at 90.2 and 89.8 in extension.
Support levels:
S1 - 90.29 (Friday's low)
S2 - 89.8
S3 - 89.6
Alternative scenario:
Buy above. 91 Above 91 look for further upside with 91.25 and 91.55 as targets.
Resistance levels:
R1 - 91.26 (Monday's high)
R2 - 91.55
R3 - 91.75
Technical Comment:
The pair remains under pressure and is challenging its support.