Friday’s US Non-Farm Payroll came in slightly above expectations, showing an increase of 315,000 jobs in August. However, country’s unemployment rate also rose to 3.7% last month, likely stemming from an increase in the participation rate.
The US Dollar traded relatively flat on the day, initially moving lower following the NFP print, before paring gains. Attention will now shift towards US CPI data ahead of the next FOMC Meeting.
This could make USD/JPY an interesting pair to watch as the market assess the American economy’s health against expectations for Federal Reserve’s policy plans. The pair has surged to its highest level since 1998, and currently trades around the major psychological level of 140.
Can it extend its breakout over the coming days, or will traders begin to take profits?
Check out this article for an in-depth technical analysis on USD/JPY:
I’m not in this pair at this time but have been following the trend recently. My question is only a matter of timing - if the trend continues I will get in soon: if it doesn’t I’ll be annoyed I will have to wait for perhaps another week for a new trend to establish.
With the Yen currently on track for its worst year on record, it will be very interesting to see how the BOJ reacts. Even a slight change in tone could help spark a pullback and some profit-taking in USD/JPY
However, all trading carries risk, and sticking with their current stance could see pair continue its relentless rise as the US and Japanese yield curve keeps widening.
I was about to ask just how high this pair can go, so this was a good read.