The USD/JPY is experiencing a large topside movement during the U.S trading session following yesterday’s sizable pullback in the currency pair. There are presently no visible headlines giving a concrete reason for the Yen’s relative weakness. However, there is something at work right now considering the extent of the Yen’s pullback. Perhaps 
oversold conditions are driving the USD/JPY higher, though the gains seem a bit abrupt to be derived from oversold factors. Hence, investors should keep an eye on the news wire for information detailing the Yen’s weakness. Meanwhile, we are witnessing broad based strength in the Dollar following disappointing U.S. Pending Home Sales data. Although Japan will be quiet on the data wire tomorrow, the U.S. will release Non-Farm Employment Change and headline Unemployment Rate figures. Hence, the FX markets could end the trading week on a volatile note.
Technically speaking, today’s recovery is a welcome development considering the extent of the USD/JPY’s decline over the past week or so. In fact, the USD/JPY almost tested 88 before jolting back up above 89. However, downward pressure does remain on the currency pair since the BoJ and DPJ are still in disagreement over the necessity of additional liquidity injections. The USD/JPY still faces multiple downtrend lines along with previous March highs and the highly psychological 90 level. As for the downside, the USD/JPY does have multiple uptrend lines serving as technical cushions along with 3/2 and 3/3 lows. Additionally, the psychological 90 level could have an influential role over near-term price action.
Present Price: 89.11
Resistances: 89.14, 89.19, 89.28, 89.35, 89.41, 89.50
Supports: 89.04, 88.93, 88.84, 88.78, 88.71, 88.64, 88.57
Psychological: 90, 89, March highs and lows
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