USD/JPY made a strong upside break recently, both on its short-term and long-term time frames, and forex technical analysis signals all point to further gains. The Ichimoku Kinko Hyo indicator in particular confirms that an uptrend is underway and that USD/JPY may be on track to test the 105.00 major psychological resistance.
On its 1-hour time frame, it can be seen that USD/JPY’s rally has been very strong lately. This was spurred by upbeat expectations for the upcoming NFP release from the US economy, as well as the expected drag on the Japanese economy caused by the sales tax hike implementation this month.
The US economy is set to print its ADP non-farm employment change report today and possibly a show a higher jobs reading compared to the February figure. If that’s the case, the US dollar could continue to advance against most of its major currency counterparts, including the yen.
USD/JPY Forex Technical Analysis
As for forex technical signals from the indicators on the USD/JPY chart, it can be seen that the green line crossed above price a couple of days back, an early buy signal for USD/JPY. Later on, price moved above the blue line, indicating a confirmation of the uptrend. Around the same time, the red line also started climbing, indicating that a new market trend has started.
There could still be a chance to hop in the uptrend on a pullback to the support levels marked by the orange lines. The first support zone is located at 102.76 while the second one is at 103.17. Additional support could be found around the 103.00 major psychological level.
There are no major reports due from Japan for the next few hours, which suggests that the main driver of USD/JPY price action would be US economic data. A bleak ADP reading might inspire a quick selloff, but the uptrend might still stay intact since the yen is in a much weaker position at the moment.
To contact the reporter of the story: Marco Roemer at email@example.com