USD/JPY : Supported by a Rising Trend Line 2012-12-26	5/5

Show full picture Overview:
USD/JPY is to consolidate with bullish bias after hitting 20-month high of 84.96 Tuesday. Liquidity is thin as the markets in several countries are shut for post-Christmas holiday. USD/JPY is underpinned by negative JPY sentiment as Shinzo Abe, who is set to be formally elected prime minister today, warned the Bank of Japan to set a 2% target for price inflation at its January policy-board meeting or his administration would force the central bank into a policy accord through a revision of the law. USD/JPY is also supported by demand from Japan importers and investment trusts. But USD/JPY gains tempered by Japan exporter sales and worries that Washington lawmakers may be unable to avert the fiscal cliff of automatic spending cuts and tax increases due to kick in next year. Preference: long positions above 84.85 with targets @ 85.7 & 86 in extension.
Resistance Levels:
R1 - 85.7
R2 - 86
R3 - 86.2
Alternative scenario:
Below 84.85 look for further downside with 84.65 & 84.4 as targets.
Support Levels:
S1 - 84.60 (Tuesday's low)
S2 - 84.4
S3 - 84.27 (Monday's low)  
Technical Comment:
The immediate trend remains up and the momentum is strong. USD/JPY daily chart is positive-biased as MACD bullish, stochastics stays elevated at overbought, 5- & 15-day moving averages are rising.