Overview:

USD/JPY is consolidating after hitting two-week high of 78.72 on Thursday, as markets await 12:30 GMT U.S. September non-farm payrolls (expected +118,000) and Unemployment rate (seen staying at 8.1%). Focus also on Bank of Japan monetary policy decision: Central bank is not expected to announce new easing measures today although pressure is likely to continue mounting for more action in the run-up to its next policy board meeting scheduled for Oct. 30. USD/JPY underpinned by reduced safe-haven appeal of yen and yen-funded carry trades amid positive global risk sentiment (VIX fear gauge eased 5.7% to 14.55; S&P rose 0.72% overnight) on lower-than-expected latest U.S. weekly jobless claims (came in at 367,000 vs. 370,000 forecast) and smaller-than-expected 5.2% fall in U.S. factory orders in August (vs. minus 6.0% forecast), while FOMC meeting minutes reminded investors of the do-what-it-takes mindset behind Fed policy to support a fragile economy. USD/JPY is also supported by higher U.S. Treasury yields, demand from Japan importers, and investment trusts. But USD/JPY is upside limited by Japan exporter sales, positions adjustment before weekend.

LONG positions above 78.3 with 78.7 and 78.85 as next targets.

Resistance Levels:
78.72-78.81 band (Thursday's high -- 100-day moving average)
78.85 *** intraday resistance
79.23-79.31 band (Sept. 19 high -- 200-day moving average)
79.66 (Aug. 20 reaction high). 

Alternative scenario:
The downside penetration of 78.3 will call for a slide towards 78.10 and 77.95.

Support Levels:

78.10 (Wednesday's low) 
77.97 (Tuesday's low)
77.79 (Monday's low)
77.43 (Sept. 28 low).  

Comment:
USD/JPY daily chart still positive-biased as MACD and stochastics in bullish mode, five-day moving average staged bullish crossover against 15-day MA.The RSI lacks downward momentum.

Ahsan Aslam 
E-mail: [email protected]