USDJPY keeps firm tone and holds just under new multi-month high in early Wednesday, with near term focus at the upside, after recent consolidation faced multiple downside rejections.
Fundamentals remain favorable for dollar as Bank of Japan is likely to keep rates on hold on the policy meeting later this month, while the US economy is strong and expected to register further growth after Trump’s administration takes over.
US December labor reports are expected to be strong (JOLTS report, released on Tuesday, showed stronger than expected results) with focus on ADP private sector payrolls (today) and Non-Farm payrolls, unemployment and average earnings (Friday) which could further boost the dollar.
Technical picture on daily chart is firmly bullish and underpins the action for push towards psychological 160 barrier and recent top at 161.95.
However, threats of intervention by Japanese authorities at this zone should be considered, following the similar action in July last year.
Rising 10DMA offers immediate support at 157.56, followed by more significant supports at 156 zone (higher base / rising 20DMA), which should ideally contain dips.
Res: 158.42; 159.00; 160.00; 160.19
Sup: 157.56; 156.24; 155.96; 154.18
