Risk trades returned with a bang this morning and this has been a double benefit to USD/JPY. We closed the week quite strongly after coming from the lows down at 96.80 and holding into the 98’s, and this morning we’ve broken the resistance line from the May highs through July at 98.85. Whatever resistance there was at 99.00 was toasted without a second thought as the Nikkei closed up and European stocks came out the traps strongly.
USD/JPY daily chart 02 September 2013
We’ve broken above the 55 and 100 dma’s and touched above the 61.8 fib from the Jul/Aug hi/lo at 99.37. A move through strong sell orders at 99.50 were a stretch too far and more orders are piled up through to our old mate at 100.00 where strong technical resistance lies at 100.07. With the US shut today I can’t see any big moves happening for the rest of the day so the levels Mike posted should hold and provide a top. We’ve smashed the nearby tech resistance today and the next batch is at the early August highs at 99.94. Below support should come in at the 100 dma and the broken trendlines
This month is a very big month for the dollar. The data this week will be scrutinised with a fine toothed comb, and particularly non farms on Friday will be one of the most important for a long while as we get the final signals for the taper bet.
Bulls will be hoping to retake 100 and this week could be do or die for that.
