29.11.201213:42 Forex Analysis & Reviews: USD/JPY: Bullish Bias Above 81.9

Overview:
USD/JPY is trading in higher range. The rate is underpinned by buying of yen crosses amid rejuvenated investor risk appetite (VIX fear gauge eased 2.58% to 15.51; S&P rose 0.79% overnight) as optimistic comments from U.S. President Obama and House Speaker Boehner about U.S. budget talks raised hopes that a deal would be secured before the year-end deadline for the U.S. economy to dodge the fiscal cliff; meanwhile, The Wall Street Journal reported that the Federal Reserve will likely continue buying long-term mortgage-backed and Treasury bonds in 2013 that are now part of the Operation Twist program that is set to expire on Dec. 31. USD/JPY is also supported by demand from Japan importers and investment trusts; expectations that opposition Liberal Democratic Party will win mid-December elections and push for aggressive monetary easing. But USD sentiment is dented by lower-than-expected U.S. October new home sales of 368,000 (vs. 385,000 forecast). USD/JPY gains also tempered by Japan exporter sales.
Preference:
Buy above 81.9 with targets 82.3 and 82.6 in extension.
Resistance Levels:
R1 - 82.22-82.31 band (Wednesday's high-Tuesday's high)
R2 - 82.63 (Monday's high)
R3 - 82.84 (seven-and-a-half month high hit Nov. 22) 
Alternative scenario:
Sell below 81.9. Below 81.9 look for further downside with 81.65 and 81.4 as targets.
Support Levels:
S1 - 81.68-81.65 (Wednesday's low-Nov. 21 low)
S2 - 81.4
S3 - 81.13-81.08 (Nov. 20 low-Nov. 19 low) 
Technical Comment:
The pair has broken above a bullish flag upper boundary and should post further advance. USD/JPY daily chart is mixed as MACD is bullish; but stochastics is bearish at overbought.