USD/JPY Rising Towards The 2020 High, New Highs Likely

Key Highlights

• USD/JPY found support near 108.30 and started a fresh increase above 109.50.
• There was a break above a key bearish trend line with resistance near 109.70 on the 4-hours chart.
• The US Initial Jobless Claims for the week ending Feb 01, 2020 declined from 217K to 202K.
• The US nonfarm payrolls could increase 160K in Jan 2020, more than the last 145K.

USD/JPY Technical Analysis

In the past two weeks, the US Dollar declined from well above 110.00 against the Japanese Yen. USD/JPY even traded below 109.00 before the bulls appeared near the 108.30 level.

Looking at the 4-hours chart, the pair traded as low as 108.30 and recently started a fresh increase. There was a break above the 109.00 and 109.20 resistance levels.

Besides, the pair climbed above the 50% Fib retracement level of the last major decline from the 110.29 high to 108.30 low. It opened the doors for more gains above 109.50, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair even climbed above the 76.4% Fib retracement level of the last major decline from the 110.29 high to 108.30 low. It seems like the pair might continue to rise towards the 110.29 high.

Any further gains could set the pace for more gains above the 110.50 and 110.60 levels in the near term. On the downside, the previous resistance near 109.40 and the 100 SMA might provide support.

Fundamentally, the US Initial Jobless Claims figure for the week ending Feb 01, 2020 was released by the US Department of Labor. The market was looking for a decline in claims from 216K to 215K.

The actual result was way better, as the US Initial Jobless Claims declined to 202K. Besides, the last reading was revised for 217K.

The report added:

The previous week’s level was revised up by 1,000 from 216,000 to 217,000. The 4-week moving average was 211,750, a decrease of 3,000 from the previous week’s revised average.

Overall, USD/JPY remains well supported for more gains above 110.00 and 110.20. Conversely, both EUR/USD and GBP/USD are declining and struggling to recover.

Upcoming Economic Releases

• US nonfarm payrolls Jan 2020 – Forecast 160K, versus 145K previous.
• US Unemployment Rate Jan 2020 – Forecast 3.5%, versus 3.5% previous.
• Canada’s employment Change payrolls Jan 2020 – Forecast 15K, versus 27.3K previous.
• Canada’s Unemployment Rate Jan 2020 – Forecast 5.6%, versus 5.6% previous.