The US dollar is vulnerable to the FOMC minutes later today and Jackson Hole on Friday but but the technicals continue to improve.
On Monday the US dollar broke out against the euro and pound; today it’s the Japanese yen. The key short-term resistance level of 103.09 gave way in Asian trading, leading to a quick move to 103.23 and eventually as high as 103.40.
USD/JPY daily
Now there is very little resistance standing in the way of a test of the March high of 104.13. We’re above all the major moving averages but the daily RSI is near overbought territory at 70.
As Ryan notes, the US dollar strength is beginning to look a touch overdone in the near-term but even a shallow pullback to 103.00 would attract fresh longs.
Bottom line: Trade the headlines but stick with the long bias.
