USDJPY may extend recovery towards 110 on fresh bullish sentiment
The pair cracked 107 barrier in extension of rally that started at the beginning of Asian session today and was further boosted by upbeat US NFP data.
Non-Farm payrolls surprised strongly at the upside, while higher than expected unemployment and lower earnings soured.
However, overall picture is positive and showing growing momentum in labor sector which supports scenario of more aggressive Fed this year, bringing the fourth rate hike on the table.
The dollar/yen fresh bulls were initiated by significant drop in demand for safe haven assets on growing optimism over US/NK talks and further helped by overall solid US jobs data.
Today’s break above three-day congestion top generated initial bullish signal and sidelined downside risk, signaling stronger correction after broader bears ran out of steam on approach to 105 support.
Fresh momentum is building for further advance after rally took out pivots at 106.75 (Fibo 61.8% of 107.67/105.24 bear-leg, reinforced by falling 20SMA).
Close above the latter will generate fresh bullish signal for extension towards recent highs at 107.67 and 107.90, with stronger acceleration higher to unmask psychological 110.00 barrier.
Improved daily studies and the pair on track for strong bullish weekly close, support scenario, along with bullish signal from weekly chart where slow stochastic is emerging from oversold territory.
Res: 107.05; 107.24; 107.67; 107.90
Sup: 106.86; 106.42; 106.15; 105.89