6 Sep 2013
USD/JPY exceeds technical hurdles Thursday but starts to correct early Friday
FXstreet.com (Barcelona) - The USD/JPY reacted as expected (bullishly) to the relatively strong economic data from the US Thursday. However, the overbought cross now appears to be correcting lower.
USD/JPY starting to correct lower - finally
USDJPY traders took all of the bullish US data in on Thursday and treated it as a turbo booster for their bullish engines – sending the cross past psychological resistance at 100. The data included:
o ADP Employment numbers came out just below expectations – slightly DXY-bearish
o Weekly jobless Claims came out lower-than-expected – slightly DY bullish
o Labor Costs came in lower-than-expected – DXY-bearish
o Productivity came in much higher than anticipated – DXY-bullish
o Factory orders declined less-than-expected – DXY-bullish
o ISM Non-Manufacturing data came in higher-than-expected – DXY-bullish
Early Friday, however, we’re seeing what appears to be the beginnings of a pullback in the USD/JPY – possibly due to some rumors regarding the US / Syria situation. If the chatter around that situation flares up, which can happen at any point, we’re likely to see renewed Yen buying as a safe harbor instrument.
Syria aside, they key drivers of the trading action in USD/JPY Friday will be the Bank of Japan’s monthly economic survey, leading index and coincident index and the monthly jobs report out of the US.
Technical outlook for USD/JPY
Technicians say the chart for USD/JPY is growing more bullish by the day, but that the cross was overdue for a downside correction coming into Friday’s session. It appears that the correction may have just started at around 23:00 GMT. Support comes in at 99.80 and has more buying interest likely to come in at around 99.50. Resistance obviously comes in at early Friday’s high of 100.22.
USD/JPY starting to correct lower - finally
USDJPY traders took all of the bullish US data in on Thursday and treated it as a turbo booster for their bullish engines – sending the cross past psychological resistance at 100. The data included:
o ADP Employment numbers came out just below expectations – slightly DXY-bearish
o Weekly jobless Claims came out lower-than-expected – slightly DY bullish
o Labor Costs came in lower-than-expected – DXY-bearish
o Productivity came in much higher than anticipated – DXY-bullish
o Factory orders declined less-than-expected – DXY-bullish
o ISM Non-Manufacturing data came in higher-than-expected – DXY-bullish
Early Friday, however, we’re seeing what appears to be the beginnings of a pullback in the USD/JPY – possibly due to some rumors regarding the US / Syria situation. If the chatter around that situation flares up, which can happen at any point, we’re likely to see renewed Yen buying as a safe harbor instrument.
Syria aside, they key drivers of the trading action in USD/JPY Friday will be the Bank of Japan’s monthly economic survey, leading index and coincident index and the monthly jobs report out of the US.
Technical outlook for USD/JPY
Technicians say the chart for USD/JPY is growing more bullish by the day, but that the cross was overdue for a downside correction coming into Friday’s session. It appears that the correction may have just started at around 23:00 GMT. Support comes in at 99.80 and has more buying interest likely to come in at around 99.50. Resistance obviously comes in at early Friday’s high of 100.22.