usdjpy maintains bullish trend on fed anticipation 1788972015
<p>USD/JPY surged early on Wednesday as anticipation of the Federal Reserve’s mid-December meeting continued to build, pushing the US dollar up against most major currencies […]</p>
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USD/JPY surged early on Wednesday as anticipation of the Federal Reserve’s mid-December meeting continued to build, pushing the US dollar up against most major currencies before the greenback gave back much of those gains later in the day.
Since mid-October, when a clear daily hammer candle spiked down to major support around the key 118.00 level, USD/JPY has rebounded sharply along a well-defined uptrend line as a Fed rate hike in December increasingly came to be expected.
The last Non-Farm Payrolls (NFP) report in early November far exceeded expectations, prompting a dramatic breakout above prior resistance at 122.00. Since that breakout, USD/JPY has remained strong, but has essentially traded in a range for the past three weeks. The high of that range in mid-November was around the 123.75 level, which was approached early today before the dollar’s gains were pared in the afternoon.
With not much in the way of key data events for the yen during the remainder of this week, all eyes will be focused on the dollar and how it may be affected by the new NFP and Unemployment Rate reports that will be released this Friday. If Wednesday’s significantly better-than-expected ADP private employment report can serve as any indication of Friday’s official job numbers, USD/JPY could soon see a breakout above the noted 123.75 range high and a continuation of the recent bullish trend. In the event of this breakout, the next major upside target and a key resistance barrier resides at the 125.00 level, which was last reached in August.
Only a substantially worse-than-expected employment number on Friday would likely derail the dollar’s recent strength. In this event, a dollar pullback may lead to a USD/JPY breakdown below the noted uptrend line that goes back to mid-October. Any near-term breakdown of this nature should find relatively strong support around the noted 122.00 level, which has turned from resistance to support after November’s breakout.
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