USD/JPY has been following the bullish trajectory. The pair is trading above 113.00 area with a daily close. Japan has provided downbeat economic data recently which encouraged gains on the USD side as the US presented strong nonfarm payrolls.
Recently US Employment reports were quite positive which helped the currency to sustain the bullish momentum in the pair. Recently US Average Hourly Earnings report was published with a decrease to 0.2% as expected from the previous value of 0.3%, Non-Farm Employment Change increased to 250k from the previous figure of 118k which was expected to be at 194k, and Unemployment Rate remained unchanged at 3.7% as expected. Recently ISM Non-Manufacturing PMI was published with a decrease to 60.3 from the previous figure of 61.6 while performing better than the expected decline to 59.3. Today investors are braced for a turbulent day on Forex for USD as the midterm congressional election is sceduled for Tuesday. Voters will elect all 435 members to the US House of Representatives and 34 members to the Senate. Besides, the US central bank is running a policy meeting. The policy update will be announced on Thursday. The official funds rate is widely expected to be unchanged at 2.25%. USD is expected to be quite vulnerable to certain surprises along the way.
On the JPY side, today Household Spending report was published with a decrease to -1.6% from the previous value of 2.8% which was expected to be at 1.6%. The significant decrease in the report provided extra room for further advance of USD. Ahead of the Current Account and Bank Lending reports, analysts have mixed expectations for upcoming reports.
Meanwhile, upbeat reports from the US prop up a further rally USD. This week the economic calendar contains reports and events of crucial importance for USD. Thus, any positive outcome is likely to extend the bullish momentum in this pair further. Amid mixed expectations for Japan's data and in case of weak figures, USD/JPY is expected to struggle further to regain pressure in the process.
Now let us look at the technical view. The price is currently residing above 113.00 area with certain bullish pressure which is expected to lead to further bullish momentum in this pair. The price, supported by the dynamic level of 20 EMA and strong impulsive bullish engulfing pressure, could extend the upward move towards 114.50 area with certain corrections and retracements along the way. As the price remains above 112.00 area, the bullish bias is expected to continue.
SUPPORT: 112.00, 113.00
RESISTANCE: 114.50
BIAS: BULLISH
MOMENTUM: VOLATILE
