USDJPY – Hitting a Wall at 104.00?

USDJPY – Hitting a Wall at 104.00?

Chart Of The Day

It’s been a one-way trip for USDJPY since the start of the month, but the pair has hit a wall at the 104.00 level and may need to retrace for a few days as profit-taking kicks in.

Tomorrow the market will get the marquee economic release of the week, as US Retail Sales hits the screen and traders will get a better sense of consumer spending. Sentiment has been up and wages are rising, but if spending remains tepid it could raise doubts about the planned rate hike in December.

USD/JPY ran into a triple top at the 104.00 level and yesterday’s reversal suggests that there may be a few more days of consolidation. Still, technically the pair looks sound as long as it doesn’t violate the 101.00 figure and any dip towards 102.00 is likely to be a buying opportunity.

USDJPY – Reaching for 104.00?

USDJPY – Reaching for 104.00?

Chart Of The Day

It’s been an extraordinarily good week for USDJPY. After surviving several bear raids on the 100.00 level, the pair has stabilized and taken off like a rocket over the past few days, coming within a few pips of the 103.00 figure in today’s North American trade. The drive higher has been led by better US data as ISM Manufacturing climbed above the 50 boom/bust level and Economic Optimism improved.

Although the market may be waiting for the NFP to confirm the bullish view that Fed will begin hiking rates in earnest starting December, traders may not wait til Friday to lift the pair higher. If tomorrow’s ADP report beats the forecast, the market may decide that the news is good enough to push the pair towards the key 104.00 level. A break above that figure would confirm that a double bottom has been set in place and that the near-term trend for USDJPY is up.

USD/JPY – Will 104.00 Support Hold?

USD/JPY – Will 104.00 Support Hold?

Chart Of The Day

The correction in USD/JPY has been swift and brutal. As soon as the market realized that the proposed stimulus package may be a lot smaller than originally reported, the sold the pair with no mercy taking it down by two big figures before finally pausing at the 104.00 level.

Having now established support at the 104.00 figure the pair could head the other way if the FOMC meeting provide tailwind for the buck. Although no one anticipates any rate hikes just yet, the market will be keen to see any change in the language of the communique that could hint at a possible rate hike in September. The US data has been surprisingly resilient and that could lead the Fed to upgrade its assessment of the economy.

For now the 104.00 level is the key hold for the pair while the recent swing highs of 107.50 remain key resistance. A positive Fed release could send the pair towards a retest of those highs.