By Fast Brokers – The USD/JPY is shooting higher again today in response to stronger than expected U.S. Non-Farm Employment Change and headline Unemployment Rate data. Today’s reaction shows the USD/JPY is more vulnerable to U.S. data releases than most currency pairs at the moment. Volatility in the USD/JPY likely stems from a combination of oversold conditions and the realization that the Fed will likely tighten before the BoJ. The DPJ continues to pressure the BoJ to loosen liquidity further, yet the central bank is bucking back. On the other hand, today’s solid U.S. employment data stirs speculation that the Fed could tighten alternative liquidity measures sooner than anticipated. Despite today’s pop, the USD/JPY still does face considerable downward forces considering the extent of its decline so far this year. Additionally, the currency pair must wrestle with its key 90 area one again. Japan will reenter the fray on during Wednesday’s Asia trading session with the release of Core Machinery Orders. Additionally, China will be releasing some important data week and these figures could have a considerable influence on the Yen since China is Japan’s top trading partner. Investors will be looking to see if tighter liquidity measures in China had an impact on economic growth.
Technically speaking, this week’s recovery is a welcome development considering the USD/JPY’s recent downturn. In fact, the USD/JPY almost tested 88 before jolting back up above 89. However, the USD/JPY still faces multiple downtrend lines along with February highs and the highly psychological 90 level. As for the downside, the USD/JPY does have multiple uptrend lines serving as technical cushions along with 2/24 and 2/8 lows. Additionally, the psychological 90 level could have an influential role over near-term price action.
Present Price: 90.20
Resistances: 90.26, 90.35, 90.43, 90.56, 90.65, 90.81
Supports: 90.11, 89.95, 89.81, 89.73, 89.64, 89.54
Psychological: 90 March highs
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