By Fast Brokers – The USD/JPY is popping past previous January highs on the news that Finance Minister Fuji is resigning for health reasons. Fuji’s replacement, Naoto Kan, has already established a more dovish monetary stance after expressing his preference for a weaker Yen. Kan’s approach counteracts Fuji’s more neutral monetary stance, encouraging investors to sell-off the Yen, a positive development for the USD/JPY. Meanwhile, the FX markets continue to exhibit strength in the Greenback, highlighted by weakness in the EUR/USD and Cable. Hence, not only is the USD/JPY benefitting from Fuji’s resignation but also broad-based Dollar strength. Investors are continuing to eye tomorrow’s U.S. economic data set. The U.S. will print its headline Unemployment Rate and Employment Change data. Since a turnaround in U.S. employment data triggered December’s Dollar rally, tomorrow’s data set could carry some added weight. Therefore, more impressive U.S. employment data could benefit the USD/JPY once again. On the other hand, disappointing data could stymie the USD/JPY’s current rally.
Technically speaking, the USD/JPY overcame some notable topside barriers during the month of December, most notably the psychological 90 level and a few heavily-weighted downtrend lines. Speaking of downtrend lines, the USD/JPY just broke through what is now our 1st tier downtrend line. Our 1st tier runs through August highs. Therefore, should the USD/JPY create some topside separation we could potentially witness a run towards the 97.50 area. Meanwhile, the USD/JPY faces multiple downtrend lines along with September highs and the psychological 95 zone. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 1/05 lows. Furthermore, the psychological 90 area could serve as a suitable cushion should it be tested.
Present Price: 93.17
Resistances: 93.21, 93.39, 93.60, 93.81, 94.08, 94.30
Supports: 92.94, 92.69, 92.46, 92.26, 92.07, 91.90
Psychological: 95, 90, January and September Highs
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