FX.co ★ USD/JPY: Downside

Overview:
USD/JPY is trading with risks skewed higher. The rate is underpinned by yen-funded carry trades amid positive investor risk sentiment (VIX fear gauge eased 8.79% to 14.01; S&P rose 0.46% overnight) as fresh assurance of central bank support helped to dispel worries that tighter China's policies to cool its housing market may hurt global recovery. This after Fed's Yellen said the U.S. central bank should press on with $85 billion in monthly bond buying as the balance of risks still called for a highly accommodative monetary policy to support a stronger recovery and more rapid growth in employment. Risk sentiment boosted after U.S. February ISM-NY Current Business Conditions Index increased to 58.8 in February, its highest since March 2012, from 56.7 in January. USD/JPY is also supported by demand from Japan importers and investment trusts; expectations of more aggressive monetary easing from Japan's central bank as BOJ governor nominee Haruhiko Kuroda told lawmakers Monday that current asset-purchase program wasn't enough to achieve the 2% inflation target, raising expectations of more quantitative easing in coming months. But yen sentiment soothed after Kuroda reportedly said it would be difficult for BOJ to buy large quantities of foreign bonds under current international rules on currencies. USD/JPY gains also tempered by Japan exporter sales.
Recommendation:
Sell below pivot point of 93.6 with targets in sight at first target at 92.7 and second target at 92.35.
Support levels:
S1 - 92.75
S2 - 92.01 (Thursday's low)
S3 - 91.75(Jan. 29 low).
Alternative scenario:
Buy above 93.6 with first target at 93.6 and second target 94.2.
Resistance levels:
R1 - 93.60
R2 - 94.20
R3 - 94.77 (two-and-a-half year high hit Feb. 25)
Technical comment:
Daily chart is mixed as MACD is bearish, but stochastics is in bullish mode.