USDJPY – While we retain our broader medium term bearishness (as long as the pair trades within its established declining channel) on the pair, immediate risk continues to point higher suggesting USDJPY may retarget its Dec 04’09 high at 90.77. This is coming on the back of its Tuesday strength followed with a bid tone in early trading today. If above the 90.77 level is traded, the pair will resume its rally initiated from the 84.80 level and create further upside scope towards its Nov 04’09 high at 91.31 with a cut through there allowing additional strength to aim at the 92.31 level, its Oct 27’09 high. Its daily RSI has turned higher supporting this view. Downside target is located at the 88.30 level, its Dec 14’09 low followed by the 87.37/10 levels, its Dec 09’09/Jan 18’09 lows with a penetration of there targeting its Nov 30’09 low at 85.85 and then the 84.80 level where its YTD low is located.

Daily Chart: USDJPY