We area seeing mixed trading this week in USD/JPY, but today’s US jobs data may help traders decide on at least a short-term direction. After moving back down from this week’s highs of 111.150, the pair rebounded from near 110.25, to break above 110.55. Also, one thing to point out is that USD/JPY is trading above the short-term upwards moving support line, taken from the low of 29th of May. For now, we remain neutral, as this could play out both ways, due to the US jobs number today.
If the data comes out on the positive side, USD/JPY could spike north and get closer to this week’s high at 111.15. If the bulls maintain their momentum and manage to drive the battle above that level, then we could see them driving the pair all the way to the 111.40 zone, marked by the high of the 21st of May.
The RSI is just slightly above the 50 line but points sideways. The MACD is also flat, not giving us any clear indication.
On the downside, if we see a move below 110.55, then we could expect USD/JPY to go lower and test the 110.25 area, marked by Wednesday’s low. The catalyst for such a slide could be a disappointment in today’s employment figures. Further depreciation in the rate could lead to a test of the 109.95 zone and at the same time the aforementioned upside support line. A break of that line could invite more bears into the game and could open the path towards the 109.70 level or even the 109.35 hurdle, marked by the low of the 25th of June.
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