By Fast Brokers – The USD/JPY is continuing its incredible run, peaking above its psychological 94 level as investors digest a wealth of manufacturing data from around the globe. Japan’s Tankan Manufacturing Index printed in line with analyst expectations while the non-manufacturing came in a bit above estimates. Additionally, Manufacturing PMI data from China and the UK met expectations while America’s outperformed. Hence, today’s data wire shows us manufacturing is running full steam ahead around the globe, a positive sign for the risk trade. Hence, investors are feeling comfortable dipping back into the USD/JPY. Additionally, positive U.S. data brings the Fed one step closer to raising rates, which is looking likely to occur before the BoJ. Despite today’s solid Tankan data, the BoJ is still under pressure from the DPJ to fight deflation with elections coming up in a few months. That being said, it will be interesting to see how tomorrow’s U.S. employment data fares. Even though the ADP came in negative on Wednesday, the advanced number has a reputation for being unreliable. With many investors on holiday, volatility could pick up around the FX markets as key economic data coincides with what could be a light volume session.
Technically speaking, the USD/JPY is currently testing the resilience of January highs. The USD/JPY has set new 2010 highs in the process, a key technical move regarding the longevity of the currency pair’s uptrend. The USD/JPY faces technical barriers in the form of its psychological 94 level, 8/28, and 8/26 highs. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday lows and the psychological 93 level.
Present Price: 93.86
Resistances: 93.91, 94.06, 94.26, 94.40, 94.56, 94.74
Supports: 93.67, 93.57, 93.40, 93.32, 93.25, 93.08
Psychological: .94, .93, 2010 highs
(click chart to enlarge)
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