FX.co ★ USDJPY: Bearish

Overview:
USD/JPY is trading with risks skewed lower. The rate is undermined by unwinding of JPY-funded carry trades amid decreased investor risk appetite (S&P slipped 0.18% overnight) after European Central Bank President Draghi gave a downbeat assessment of the euro-zone economic prospects, while U.S. 4Q productivity fell more-than-expected 2.0% on quarter (vs. minus 1.6% forecast). USD/JPY is also weighed by profit-taking on yen shorts ahead of weekend; Japan exporter sales. But USD/JPY losses tempered by demand from Japan importers; aggressive Bank of Japan's monetary easing policy to combat inflation and achieve a weaker yen. Yen crosses are vulnerable to China January trade balance and 05:30 GMT China January PPI, CPI data. USD/JPY daily chart is still positive-biased as MACD is bullish, stochastic stays elevated at overbought, 5- and 15-day moving averages are rising.
Preference:
Sell below 94 with targets at 91.95 and 91.35 in extension.
Support levels:
S1 - 91.96 (Tuesday's low)
S2 - 91.35
S3 - 91
Alternative scenario:
Buy above 94. Above 94 look for further upside with 94.45 and 95 as targets.
Resistance levels:
R1 - 94.45
R2 - 94.99 (May 4, 2010 top)
R3 - 95.35
Technical comment:
As long as 94 is resistance, expect a return to 91.95.