FX.co ★ USDJPY: Upside

Overview:
USD/JPY is in range-trade. The rate is undermined by selling of yen crosses amid negative global risk sentiment (VIX fear gauge jumped 18.23% to 13.36, S&P fell 0.55% overnight) as news that a bank deposit levy was included in Cyprus' bailout plan sparked fears of a new phase in the euro-zone debt crisis, although concerns were soothed by reports that international lenders were considering amending the deal to scrap the levy on deposit holders below EUR 100,000. USD/JPY is also weighed by weaker USD sentiment after surprise drop in U.S. March NAHB housing market index to 44 this month from 46 in February (vs. forecast for rise to 48); lower U.S. Treasury yields; Japan exporter sales. But USD/JPY downside is limited by demand from Japan importers; expectations of aggressive monetary easing by Bank of Japan to achieve 2% inflation target. Data focus: 12:30 GMT U.S. February housing starts and building permits. Daily chart is negative-biased as stochastics is bearish at overbought; MACD is staging bearish crossover against its exponential moving average.
Recommendation:
Buy above 94.91 with upside targets at 95.65 and 96.28.
Resistance levels:
R1 - 95.61 (Monday's high)
R2 - 96.28 (Friday's high)
R3 - 96.60 (Thursday's high).
Alternative scenario:
Sell below 94.91 with downside targets at 94.64 and 94.3.
Support levels:
S1 - 94.65
S2 - 93.45 (Monday's low)
S3 - 92.99-92.92 band (March 6 low-March 5 low).