The USD/JPY is continuing its consolidation pattern around 89 as the FX markets settle following yesterday’s high volatility in the Cable. Japan’s Household Spending figure came in almost a full percentage point below analyst expectations and is likely helping buoy the USD/JPY with investors exerting a relative preference for the Dollar. The 
U.S. has been quiet on the data front today and this is likely contributing to the FX cool down. However, volatility could pick back up tomorrow with the U.S. and UK releasing their respective Services PMI data points. Additionally, the U.S. will print ADP Non-Farm Employment Change data. Hence, activity should pick up with key data points and central bank meetings on the way. Japan will print Average Cash Earnings during tomorrow’s Asia trading session and analysts are expecting an improvement to -1.2%. Australia will likely garner the spotlight by releasing GDP. Furthermore, it will be interesting to see whether the large decrease in lending by China’s banks during the month of February has an impact on Pacific currencies. It will be encouraging if the USD/JPY can continue to establish a new base from which to head north for another battle with its highly psychological 90 level.
Technically speaking, the USD/JPY has multiple uptrend lines serving as technical supports along with February lows. As for the topside, the USD/JPY faces multiple downtrend lines along with March highs and the highly psychological 90 level should it be tested.
Present Price: 89.11
Resistances: 89.19, 89.28, 89.35, 89.41, 89.50
Supports: 89.10, 89.04, 88.93, 88.84, 88.78
Psychological: 90, February lows, March highs
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