USDJPY: Eyes On Recovery

USDJPY -While we still maintain our medium term bearish structure view on USDJPY, its recovery generated off a hammer low at 88.59 on Friday continues to build up strength slowly. That puts immediate risk to the upside suggesting further higher  upmove could be shaping up towards its Sept 30'09 high at 90.40 where a violation will create scope for further recovery higher towards the 91.57 level, its Sept 24'09 low. Further out, resistance is seen at the 92.57 level where a cap is expected. Its daily RSI is slowly turning higher supporting this view. On the downside, its hammer low at 88.59 comes in as the initial support with a breach putting the next target at the 88.21 level, its Sept 27'09 low. A resumption of its short term declines started at the 101.43 level will be triggered on a break below the latter and open the door for lower prices towards the 87 .10 level, its YTD low. On the whole, though recovering from its recent  low, USDJPY still retains its broader bearish bias.

Daily Chart: USDJPY