The USD/JPY is consolidating well above Friday lows after tipping over in reaction to the news from Dubai combined with last week's solid Japanese econ data. Meanwhile, the USD/JPY is fighting to get back above December 2008 lows as U.S. equities and crude turn positive. Japan's Industrial Production number came in well below analyst expectations, allowing investors to buoy the Yen against the Dollar. Although neither the BoJ nor the Finance Ministry have made any more aggressive comments in regards to an intervention, it seems investors are already pricing in the potential of governmental action considering how close the USD/JPY is getting to its all-time lows. For the time being, we'll just have to wait and see how investors decide to move forward with the Dubai debt issue in succession with key econ data from China, the U.S. and UK. China will release its Manufacturing PMI data late Monday EST followed by an RBA rate decision. On Tuesday investors will receive HPI and PMI data from the UK followed by America's own Manufacturing PMI release. Therefore, the FX markets could be in for an active 24 hours. Should the approaching wave of econ data print positively, investors may be willing to wade back into the risk trade while balancing the USD/JPY. However, negative fundamental results could add onto the negative psychological impact from Dubai and unwind the risk trade, sending the USD/JPY lower as a result.

Technically speaking, 85 appears to be the new psychological benchmark with 90 hanging far overhead. It's a bit troublesome to place supports on our chart right now due to limited historical reference. However, we can tell you that the 82.50-85 area proved to be a strong support area during the Spring/Summer of 1995. Therefore, the USD/JPY could experience similar support should the currency pair's the downturn continue. As for the topside, there are multiple downtrend lines serving as technical barriers as the long-term downtrend bears down on price. Therefore, the USD/JPY will likely need strong support from the bulls to stage a noteworthy rally.

Present Price: 86.55

Resistances: 86.57, 86.81, 87.04, 87.22, 87.46, 87.72, 87.82

Supports: 86.34, 86.20, 85.99, 85.74, 85.51, 85.22, 84.84, 84.60

Psychological: 85, 80, 90