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USD/JPY gains further traction, jumps to 104.00 neighborhood

The greenback's bullish momentum seems to have gathered pace in the past hour of trading, lifting the USD/JPY pair back closer to 104.00 handle.

Recovery in US equity market dented the safe-haven appeal of the Japanese Yen. This coupled with intense selling pressure around the EUR/USD major is helping the overall US Dollar Index to extend its bullish reaction to better-than-expected Philly Fed Manufacturing Index and Existing Home Sales data. 

Other US economic data showed weekly jobless claims rose more-than-expected to a six-week high but did little to disturb the pair's upward trajectory as the pace of layoffs remained extremely low, indicating the underlying strength in the US labor market. 

Focus now shifts to BOJ Governor Haruhiko Kuroda's speech during early Asian session on Friday, which might provide fresh impetus for the pair's next leg of directional move.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "In the 1 hour chart, the price is below its 100 and 200 SMAs, with the shortest at 103.85, while technical indicators turned lower within positive territory, but showing no directional strength. In the 4 hours chart, the price holds well above a bullish 100 SMA, now around 103.05, although technical indicators have retreated from their mid-lines, in line with the shorter term outlook. A recovery above 104.20 is what it takes to see the pair advancing further, towards the weekly high in the 104.60 region."

"Support levels: 103.40  103.00 102.60
Resistance levels: 103.85 104.20 104.60"

 

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