USD/JPY bulls are giant and in cost, however will this week’s U.S. jobs knowledge put that pattern on shaky floor?
USD/JPY Uptrend Dip Forward?
The last time we looked at USD/JPY in December, the pair was breaking out of consolidation to the upside, suggesting that the longer-term increased was about to renew. This was assumed on condition that the pop increased was seemingly a response to a really hawkish financial coverage assertion from the Federal Reserve (decreasing bond purchases $30B a month and hinted at three fee hikes in 2022).
Since then, the bulls took again the reins on USD/JPY, pushing the pair previous the earlier swing increased at 115.50 to testing ranges we haven’t seen since 2016 above the 116.00 deal with. The query now’s whether or not or not this break will maintain or whether or not upcoming occasions will flip the trend round?
Effectively, the catalyst of the week to observe is the newest U.S. employment knowledge for December, and with expectations of a bounce from November’s disappointing numbers, its seemingly the U.S. greenback can maintain its floor towards the majors. And the argument for a jobs bounce was strengthened at this time with the employment element of ISM’s latest survey showing an eight-month high.
So, we stay bullish on USD/JPY, however with a strong run-up over the previous month of over 370 pips (+3.36% acquire and effectively over month-to-month ATR of round 200 pips), there’s a risk some revenue taking or information occasion promoting could also be within the playing cards for USD/JPY this week.
If that’s the case and U.S. jobs knowledge stays sturdy, we’ll be anticipating a dip to the world between the rising trendline, transferring averages, and former swing excessive. If we see bullish reversal candles there, we’ll contemplate a possible lengthy place to play the financial coverage/financial restoration divergence between the U.S. and Japan.
What do you guys suppose? Is USD/JPY due for a dip or will we get a bitter U.S. jobs quantity to however USD/JPY merchants in reversal mode?
Let me know within the feedback under, and as at all times, keep in mind to by no means danger greater than 1% of a buying and selling account on any single commerce. Modify position sizes accordingly. Create your personal concepts and don’t merely observe what I do.
This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market entails danger. Please learn our Risk Disclosure to be sure you perceive the dangers concerned.