The USD/JPY continues to stabilize along our 2nd tier downtrend line as investors show hesitation after February's impressive run. While it has been easy to be positive on the USD/JPY over the last month with the Carry Trade unwound and the Japanese economy decomposing at a faster rate than America's, the medium-term downtrend still looms large.

The USD/JPY has significant barriers to break through, including the highly psychological 100 level, before we can feel comfortable with the prospect of a lasting uptrend. If the U. S. should continue to release negative data while the financials crumble, the USD/JPY may be forced downwards with U. S. equities.

Investors are currently waiting to see if S&P can hold 700 and whether the U. S. steps in to nationalize Citigroup and AIG. Additionally, investors will be keeping a close eye on U. S. Pending Home Sales since the crisis began with a contraction in the housing market.

Fundamentally, we maintain our resistance of 98.25 with fresh resistances of 99.05, 99.64, and 100.30. To the downside, we find supports of 97.66, 97.22, 96.56, and 95.96.

The USD/JPY is currently exchanging at 97.65.

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