FX.co ★ USD/JPY: Upside

Overview:
USD/JPY is consolidating with bullish bias after hitting one-week high of 93.70 this morning. The rate is underpinned by positive USD sentiment after surprise rise in U.S. ISM manufacturing PMI to 54.2 in February from 53.1 in January (vs. forecast for drop to 52.5); unexpected rise in final University of Michigan February consumer sentiment index to 77.6 from preliminary reading of 76.3 (vs. forecast for no change)--upbeat U.S. data contrasted with gloomy data from the euro zone and U.K., boosting allure of the dollar. USD/JPY also supported by demand from Japan importers and investment trusts; expectations of aggressive monetary easing from Japan's central bank to achieve 2% inflation target; JPY-funded carry trades amid positive risk appetite (VIX fear gauge eased 0.97% to 15.36; S&P rose 0.23% Friday) as investors remain confident that U.S. economy can withstand the $85 billion in automatic government spending cuts which moved ahead Friday as part of $1.2 trillion sequestration--Fed Chairman Bernanke offered strong new assurances Friday that he wouldn't back away from his easy money policies, saying it would be "quite costly" to the U.S. economy and possibly counterproductive for the central bank to pull back too soon. But USD/JPY gains tempered by Japan exporter sales.
Recommendation:
Buy above 93.1 with first target 93.9 breach of first target will target 94.2.
Resistance levels:
R1 - 93.75
R2 - 94.2
R3 - 94.5
Alternative scenario:
Sell below 93.1 with target insight of 92.7 and 92.
Support levels:
S1 - 92.7
S2 - 92.01 (Thursday's low)
S3 - 91.75
Technical comment:
Daily chart is mixed as MACD is bearish, but stochastics is in bullish mode.