USD/JPY has been quite bullish recently after bouncing back above 112.00 area with a daily close. Despite positive economic reports from Japan, USD gains indicate a shift in the market sentiment which might lead to further bullish pressure in the future.
Recently, the US Federal Reserve was targeted by President Donald Trump who expressed his disaproval of a too fast pace of monetary tightening. Ahead of macroeconomic reports like Core Durable Goods Orders and flash GDP this week, the US currency is expected to be quite volatile, asserting its strength. Today Richmond Manufacturing Index report is going to be published which is expected to decrease to 25 from the previous figure of 29 and FOMC Member Bostic is going to speak today about the interest rate decision and future monetary policy. His speech is expected to contain the hawkish rhetoric.
On the JPY side, recently All Industries Activity report was published with an increase to 0.5% from the previous value of -0.2% which was expected to be at 0.4%. The positive economic report helped JPY to gain ground for a while, it but could not sustain it further. Today BOJ Core CPI report is going to be published, its previous value was 0.5%. Analyzing the recent economic reports, the actual reading of the core CPI may be quite positive which may lead to certain gains on the JPY side. However, the question is still open whether inflation is sustainable enough?
Meanwhile, USD is far superior with the gains against JPY despite the positive economic data on the JPY side. Ahead of a series of macroecnomic reports to be published this week, this pair is set to grade with higher volatility. USD is expected to have an upper hand if the upcoming reports reveal solid data.
Now let us look at the technical view. The price is currently residing above the dynamic level of 20 EMA as well as 112.00 area with a daily close which indicates further bullish momentum in the pair. The price is expected to push towards 113.00 area and later towards 114.50 area if the price manages to break above 113.00 with a daily close. On the other hand, bullish rejection off the 113.00 area is expected to push the price lower again towards 112.00 in the coming days. As the price remains above 112.00 area, the bullish bias is expected to continue.
SUPPORT: 111.50, 112.00
RESISTANCE: 113.00, 114.50
BIAS: BULLISH
MOMENTUM: VOLATILE
