By Fast Brokers – The USD/JPY is logging huge gains to the upside as the broad-based appreciation of the Dollar continues in a big way. The USD/JPY has finally woken from its hibernation after building strength along our 1st tier uptrend line. There’s no news on the wire from Japan, indicating today’s movement is a continuation of the pattern we spotted yesterday. The brisk appreciation of the Dollar and decline in gold comes after better than expected employment data from the U.S. The depreciation of the Yen is great news for struggling Japanese exporters and manufacturers who have had to make do with an abnormally appreciated currency. If the USD/JPY can piece together a solid rally, this could do wonders for Japanese economic data.
The S&P futures are reacting positively to today employment data, and are presently attempting to create some space between present price and their highly psychological 1000 level. We are speculating the Greenback’s broad-based appreciation with rising equities may indicate a reversal in crisis-oriented correlations. After all, the USD/JPY is breaking out with positive news from the U.S. However, as we explained in our other FX commentaries today, we can’t make a conclusion of this magnitude based off of 1 day of movement. On the other hand, today’s activity is certainly intriguing and should be the topic of discussion among FX traders over the weekend.
Meanwhile, the USD/JPY has leapt beyond our 3rd tier downtrend line and July highs on a spike in buy-side volume. Therefore, we could be witnessing the beginning of a new, sizable leg up in the USD/JPY. The next barriers will be our 4th tier downtrend line, 3rd tier uptrend line, and June highs. However, even if the USD/JPY can manage to take down these obstacles, the currency pair still has the highly psychological 100 level waiting in the distance. Regardless, today’s movement in the USD/JPY is very encouraging and gives USD/JPY bulls something to cheer about.
Present Price: 97.35
Resistances: 97.37, 97.78, 98.09, 98.54, 98.90
Supports: 97.05, 96.74, 96.42, 96.02, 95.75
Psychological: 95, 100
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