- The US Dollar has been the strong global currency against most major currencies since March of this year, despite a corrective setback at the end of April
- US Dollar strength has broadly resumed this week in the wake of a less dovish tone, so de facto more hawkish tone, from Fed Chairman Jerome Powell after the FOMC decision on Wednesday 1st May.
- This US$ recovery leaves USDJPY more positive in the very short-term, assisted by falling US Treasury prices (so higher yields) as we now focus on the much-watched US Employment report due for release today, Friday 3rd May.
USDJPY bias higher, post Fed decision
A rebound Wednesday after the Fed through modest resistance at 111.55, to reject a challenge to key 110.81 support from early April and ease the negative tone from the latter April plunge from 112.40 through the up trend line from mid-March, to switch the bias higher Friday.
The mid-April prod above 112.14 was enough to shift the intermediate-term outlook to bullish.
- We see an upside bias for 111.67; break here aims for 112.03, maybe 112.40.
- But below 111.02 opens risk down to key 110/81.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 113.71.
- Higher targets would be 114.55 and 115.00.
- What Changes This? Below 110.81 shifts the outlook back to neutral; through 109.66 is needed for a bear theme.
4 Hour USDJPY Chart