USDJPY-The pair may be strengthening but while the 91.27 level, its Jan 21'10 high at 91.86 and the 92.00 level, its channel top hold as resistance levels, we look for USDJPY to weaken back towards the 88.54 level, its Feb 04'10 low. On a decisive break below that level, the pair should decline further towards the 88.30 level, its Dec 14'09with a turn below there turning focus to its Dec 09'09 level at 87.35 and then the 85.85 level, its Nov 30'09 high. Further weakness if seen will put pressure on the 84.80 level, its 2009 low. This view remains valid while the pair trades and maintains within its defined falling channel. Conversely, to reverse our downside bias, USDJPY must break and hold above the 92.62 level, its channel top thereby clearing the way for higher prices towards the 93.74 level, its 2010 high. This will create further upside scope towards its Aug 02'09 high at 97.77.

width=400