FX.co ★ USD/JPY: Under pressure

Overview:
USD/JPY is trading in lower range. The rate is undermined by U.S. Treasury Department's report released on Friday that it is monitoring Japan's new policies and will press Japanese PM Abe's government to "refrain from competitive devaluation"; weaker USD sentiment after U.S. March retail sales fell more-than-expected 0.4% (vs. minus 0.1% forecast), University of Michigan consumer sentiment index's preliminary April reading dropped to nine-month low of 72.3 (vs. 79.0 forecast) from final March level of 78.6, U.S. PPI fell sharper-than-expected 0.6% in March (vs. minus 0.4% forecast). USD/JPY is also weighed by lower U.S. Treasury yields; unwinding of JPY-funded carry trades amid diminished investor risk appetite (S&P eased 0.28% Friday) on disappointing U.S. data; Japan exporter sales. But USD/JPY losses tempered by demand from Japan importers; Bank of Japan's aggressive easing measures to help reach its 2% inflation target in two years. Yen crosses are vulnerable to 02:00 GMT China 1Q GDP, March retail sales, fixed assets investment, industrial output, foreign direct investment data. Daily chart is mixed as MACD is bullish, but stochastics is turned bearish at overbought.
Recommendation:
Sell below 98.7 with downside targets at 97.5 and 97.05.
Support levels:
S1 - 97.60 (this morning's low)
S2 - 97.05
S3 - 96.71 (previous cap set March 12).
Alternative scenario:
Buy above 98.7 with upside targets at 99.45 and 99.8.
Resistance levels:
R1 - 99.5
R2 - 99.80 (Friday's high)
R3 - 99.95-100.00 (Thursday's high-psychological level)