USD/JPY Charges Higher

The USD/JPY is charging higher today as the currency pair continues its stellar performance.  Japanese Core Machinery Orders printed about in line with expectations.  Meanwhile, signs of an economic recovery in the U.S. are really benefitting the USD/JPY since the BoJ continues to be one of the loosest central banks around.  Hence, the USD/JPY is enjoying a relative strength and continuing its run from March lows.  The currency pair is back above its highly psychological 90 level.  That being said, the 90 area has had a considering influence on the USD/JPY in the past, so investors shouldn’t be surprised if the currency pair opts to gravitate around the psychological zone over the near-term.  On the other hand, today’s rally has extended the USD/JPY beyond what is now our 1st tier downtrend line.  Our 1st tier runs through 2/17 highs, or the 91.40 area.  Hence, the USD/JPY could be in for additional solid upward movements should fundamentals comply.  Therefore, investors should keep a sharp eye on tomorrow’s U.S. Trade Balance and weekly Unemployment Claims releases.  Positive U.S. economic data could push the USD/JPY higher as investors favor the U.S. economy over Japan’s.  China will also release an important data set during tomorrow’s Asia trading session, meaning the USD/JPY could remain active for the next 24-48 hours.  Keep in mind Japan will print its Real GDP tomorrow, and this fact shouldn’t be lost amidst all the news releases from China and Australia.

Technically speaking, the USD/JPYs faces our new downtrend lines along with intraday and 2/7 highs.  Meanwhile, the highly psychological 90 area could have an influence over movements in the USD/JPY over the near-term.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 3/8 lows.

Present Price: 90.78

Resistances: 90.81, 90.89, 90.94, 91.03, 91.11, 91.20

Supports: 90.67, 90.60, 90.54, 90.49, 90.44, 90.35

Psychological: 90, March highs

(click chart to enlarge)

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