The US dollar surged higher against the Japanese yen, and it looks like the USDJPY pair looks set for a move towards 109.00-20.
USDJPY Weekly Analysis – Dollar To Yen Set To Rocket Higher
· The US Dollar after a decline towards 102.00 against the Japanese yen recovered sharply.
· There was a move of more than 400 pips, and the pair is currently trading above 106.00.
· The Japanese Gross Domestic Product released by the Cabinet Office posted an increase of 2.2% in Q3 2016, more than the forecast of 0.9%.
USDJPY Technical Analysis
We saw a nasty decline in the US Dollar around the US presidential election against the Japanese yen towards the 102.00 handle. However, the USDJPY pair recovered sharply, and moved by more than 400 pips to trade above 106.00.
The pair traded above a couple of important hurdles, including a resistance trend line on the daily chart at 106.00. The pair also closed above the 106.40 resistance area signaling more gains in the short term.
The upside move looks strong, as there was a close above the 100-day simple moving average as well. It looks like the pair is heading towards the 1.236 extension the last decline from the 107.48 high to 99.57 low. So, the pair might continue to trade higher in the near term, and the chances of a move above 109.00 is also possible.
Trade Idea – If you are looking to enter a buy trade, then consider it on dips with a stop of around 40-50 pips and look for a move above 109.00.
Today in Japan, the Gross Domestic Product was released by the Cabinet Office. The market was expecting an increase of 0.9% in the monetary value of all the goods, services and structures produced in Japan in Q3 2016 (preliminary).
However, the result was very impressive, as the Japanese GDP increased 2.2% in Q3 2016, compared with the same quarter a year ago. However, it failed to lift the market sentiment for the Japanese yen, as the USDJPY kept rising.
Overall, the USDJPY pair may break the 108.00 level soon for a move above the 109.00 if the current sentiment stays intact.