USD/JPY maintains highs ahead of non-farm payrolls

<p>August 6, 2015 – USD/JPY tentatively broke out Wednesday above key resistance around the 124.50 level on marked dollar strengthening after previously having been stuck […]</p>

August 6, 2015 – USD/JPY tentatively broke out Wednesday above key resistance around the 124.50 level on marked dollar strengthening after previously having been stuck below that level since June. Thursday then saw a tight consolidation that continued to trade above 124.50 in anticipation of Friday’s non-farm payrolls and unemployment rate reports, which should help provide further guidance as to the timing of a Fed rate hike.

Expectations of this impending rate hike have pushed the currency pair up in the past month from its most recent major low of 120.40 in early July.

The sharp rise since that low comes as the Japanese yen’s safe haven role has recently been deemphasized and the dollar has appreciated broadly against other major currencies.

USD/JPY Daily Chart


As the timing of the Fed’s looming rate hike becomes clearer with Friday’s release of US employment data, USD/JPY could continue to benefit from a further potential rise in the US dollar if the employment picture turns out to be neutral-to-positive.

If the currency pair is able to sustain or re-break above the noted 124.50 level, the next major upside target is at the original 126.00 objective, slightly higher than the 13-year high around 125.85 that was reached in early June.

Any further break above that objective, which would confirm a continuation of the multi-year bullish trend, could then begin to target the 129.00 resistance level further to the upside.

In the event of a significant pullback within the current uptrend on substantially worse-than-expected employment data, strong downside support remains at the key 122.00 level.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.