Forex: USD/JPY starts 2013 higher; greenback strength underpins

FXstreet.com (San Francisco) - The Japanese yen is operating at 28-month lows against the U.S dollar in the first day of trading in 2013, driven by persistent safe haven demand on concern over U.S. budget negotiations, on expectations of easing measures in Japan, and on recent comments by Finance Minister Taro Aso on Dec. 28, which is weighing on the yen and supporting USDJPY.

The pair remains trading above the 200-week EMA (85.77) for the first time since October 2007, and the 50-month EMA (86.53) is still in a position to attract sellers. However, there appears to be little selling interest at the moment. The 23.6% Fibonacci retracement of the decline from 124.13 to 75.56 offers immediate resistance at 87.05. Next resistance is noted at 87.85 (Oct 7, 2009) then 90.90 (Oct 24, 2008). Bearish targets are seen at 85.50 (April 6, 2011 high), then 84.50 (Dec 15, 2010 high) and 84.15 (Mar 15 high).

USDJPY currently exchanges at 86.70.