USD/JPY : Riding High

(Fri, 5 Feb 2021). The US dollar has been on the rise this year as traders look to the US economy to outperform prior growth expectations. Yields on longer-dated US Treasuries continue to move higher as inflation expectations grow, while the successful implementation of the US covid-19 vaccination program underpins the belief that the US has seen the worst of the pandemic and that the economy may grow faster than official expectations - the FOMC’s median growth expectation for 2021 is 4.2%. Today’s US jobs report (NFPs) at 13:30 GMT is expected to show 50k jobs added in January, compared to 140k jobs lost in December, and while the unemployment rate is expected to remain at 6.7%, this is still sharply below the 14.8% seen in April last year.

The daily USDJPY price chart shows the turnaround in the pair since the start of the year. The double bottom made on January 5/6 prompted the pair to turn higher, much to the delight of the Bank of Japan who was starting to make noises about the strength of the Yen. The recent acceleration higher was aided by the 20- and 50-day simple moving averages crossing over, while yesterday’s break above, and today’s open above, the 200-day sma is another positive chart signal. Above here a series of old lower highs offer reference points all the way back to 108.16. Above here, progress may slow and plenty of work will need to done before 110 hooves into view.

DISCLAIMER ON

GFS ASIA TEAM

• 0
• 0
• just now
• 0