USD/JPY Daily Forecast – Attempt To Settle Above The 20 EMA

USD/JPY Video 02.09.20.

U.S. Dollar Continues Its Rebound

USD/JPY is trying to settle above the 20 EMA at 106.00 as the U.S. dollar continues its rebound against a broad basket of currencies.

Yesterday, the U.S. Dollar Index managed to find support at 91.75 and rebounded above 92 after the U.S. reported strong Manufacturing PMI data. Today, the U.S. Dollar Index managed to get above 92.50 and is trying to gain more upside momentum.

In case the U.S. Dollar Index heads to the test of the next resistance at the 20 EMA at 93, USD/JPY will get additional support.

The market will soon learn who will be the next Japan’s Prime Minister as reports indicate that the country’s ruling Liberal Democratic Party will hold its leadership election on September 14. At this point, analysts do not expect any major shifts in Japan’s economic policy.

No important economic reports will be released today in Japan so traders will focus on U.S. ADP Employment Change report which is expected to highlight a creation of 950,000 jobs in the private sector. A better-than-expected report has the potential to boost the rebound of the American currency.

Technical Analysis

USD/JPY is trying to get out of the range between the support at 105.30 and the resistance at the 20 EMA at 106.00. RSI is at moderate levels so there is plenty of room to gain more upside momentum in case the right catalysts emerge.

In case USD/JPY manages to settle above the 20 EMA at 106.00, it will head towards the next resistance level at the 50 EMA at 106.30. A move above the 50 EMA at 106.30 will open the way to the test of the resistance at 107.00.

The resistance at 107.00 has been tested several times in August and proved its strength. Most likely, USD/JPY will need strong catalysts to get above 107.00 as traders will need serious reasons to open long positions ahead of the major resistance at 107.30 – 107.50.

On the support side, the nearest support level is located at 105.30 although the 20 EMA will serve as support in case USD/JPY manages to settle above it. A move below 105.30 will open the way to the test of the next support level at 104.70.

For a look at all of today’s economic events, check out our economic calendar.