USD/JPY maintains highs ahead of non-farm payrolls
James Chen August 7, 2015 12:00 AM
<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.
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.
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