Overview:
USD/JPY continues to range trade. The rate is undermined by selling of yen crosses amid subdued risk appetite (VIX fear gauge rose 4.44% to 18.6) as U.S. stocks closed narrowly mixed overnight (DJIA down 0.08%, S&P up 0.02%) following a two-day shutdown caused by Hurricane Sandy. Investor sentiment dented after smaller-than-expected rise in U.S. Chicago PMI to 49.9 in October (vs. 51.0 forecast) from 49.7 in September, smaller-than-expected 0.4% gain in U.S.3Q employment cost index (vs. + 0.5% forecast), while euro-zone unemployment rate hit record high of 11.6% in September. USD/JPY is also weighed by Japan exporter sales; uncertainties about the U.S. presidential race and how that outcome will affect the country's budget negotiations into year end to avoid the "fiscal cliff" that could throw the U.S. economy back into recession. But USD/JPY losses tempered by demand from Japan importers and investment trusts; joint statement by Japanese government and central bank pledging to work together to end deflation; caution ahead of tomorrow's U.S. non-farm payrolls data.

Data Focus:
12:15 GMT U.S. October ADP national employment report,
12:30 GMT U.S. October 27 weekly jobless claims, U.S. 3Q non-farm productivity & unit labor costs,
14:00 GMT U.S. September construction spending, October ISM manufacturing PMI, October consumer confidence Index
21:00 GMT Fed's Rosengren speech.  

Preference:
Buy above 79.75 with targets 80.15 and 80.35.

Resistance Levels:
R1 - 80.16 (Tuesday's high)
R2 - 80.38 (Friday's four-month high)
R3 - 80.63 (June 25 high)  

Alternative scenario:
Sell below 79.75 .The downside penetration of 79.75 will call for a slide towards 79.65 and 79.5.

Support Levels:
S1 - 79.65
S2 - 79.51 (Wednesday's low)
S3 - 79.27 (Tuesday's low)  

Technical Comment:
The pair remains on the upside and is approaching its resistance. USD/JPY daily chart is mixed as MACD is bullish, but stochastics is bearish near overbought; inside-day-range pattern was completed on Wednesday.