FX.co ★ USD/JPY: Supported by a Rising Trend Line.

Overview:
USD/JPY is expected to trade with risks skewed lower. Spotlight is on Bank of Japan's monetary policy decision (central bank expected to stay on hold) and Japan 4Q 1st preliminary quarterly GDP estimates. USD/JPY is undermined by unwinding of JPY-funded carry trades amid diminished investor risk appetite (VIX fear gauge rose 2.69% to 12.98, U.S. stock indexes closed mixed overnight with DJIA down 0.26%, S&P up 0.06%) as market participants trim short yen positions ahead of G-20 meeting set to begin today in Moscow. USD/JPY is also weighed by Japan's exports sales. But USD/JPY losses are tempered by demand from Japan importers and investment trusts. USD/JPY daily chart is mixed as stochastics stays elevated and overbought; but MACD is staging bearish crossover against its exponential moving average.
Preference:
Buy above 92.9 with targets at 93.8 and 94.45 in extension.
Resistance Levels:
R1 - 93.78 (Wednesday's high)
R2 - 94.41-94.46 (Tuesday's high-Monday's two-and-a-half year high)
R3 - 94.99 (May 4, 2010, top)
Alternative scenario:
Sell below 92.4. Below 92.9 look for further downside with 92.4 and 92.15 as targets.
Support Levels:
S1 - 92.4 (Monday's low)
S2 - 92.17 (Friday's low)
S3 - 91.96 (Feb. 5 low)
Technical Comment:
Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.