USD/JPY Forex Technical Analysis – 111.715 Next Target, Potential Trigger Point for Acceleration into 112.226
The Dollar/Yen is trading sharply higher for a second session on Thursday, putting it in a position to test its highest level since March 24, 2020, ahead of a U.S. jobs report that could offer clues on when the Federal Reserve will start to pare back stimulus.
The Forex pair has posted strong gains since mid-June when the Federal Open Market Committee (FOMC) surprised the financial markets with a hawkish shift by signaling two interest rate hikes by the end of 2023.
At 10:21 GMT, the USD/JPY is trading 111.577, up 0.464 or +0.42%.
Traders are looking to Friday’s U.S. Non-Farm Payrolls report for confirmation of that outlook, with economists polled by Reuters expecting a gain of 700,000 jobs last month, compared with 559,000 in May, and an unemployment rate of 5.7% versus 5.8% in the previous month. In the rumor mill, some traders are tossing around a headline number north of a million new jobs.
On Wednesday, the USD/JPY extended its gains after data showed U.S. private payrolls increased by a greater-than-expected 692,000 jobs in June
The U.S. Labor Department is due to release the number of weekly jobless claims filed for the week ended June 26 at 12:30 GMT on Thursday. Economists polled by Dow Jones are expecting initial claims for unemployment totaled 390,000 last week, after totaling 411,000 for the week ended June 19. Additionally, Markit and ISM are due to publish their final purchasing managers’ indexes for June at 14:00 GMT.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the recent swing top at 111.117. A trade through 110.420 will change the main trend to down.
Daily Swing Chart Technical Forecast
The direction of the USD/JPY on Thursday is likely to be determined by trader reaction to 111.113.
A sustained move over 111.113 will indicate the presence of buyers. The first upside target is the March 24, 2020 main top at 111.715. This is a potential trigger point for an acceleration to the upside with the February 20, 2020 main top at 112.226 the next major target. This is also a trigger point for another potential acceleration.
A sustained move under 111.113 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the last main bottom at 110.420.