USD/JPY has continued to rally even through a strong CPI print out of Tokyo last night. The 145.00 level looked at in yesterday’s JPY video remains of interest for resistance potential but perhaps the bigger question for next week is whether the Bank of Japan hints at hikes; or whether we see a similar episode as last year with a brief test below 140.00 was followed by a massive reversal that lasted for months after.
To be sure, the USD has tested and held a big area of longer-term support that came into play on Monday. And the weekly chart of DXY remains oversold, so it’s not a simple spot to chase the Dollar lower. For DXY, both 100.22 and 102.00 remain big in the near-term and behind the push next week will be an inflation print on Wednesday with Core PCE and a jobs release on Friday with Non-farm Payrolls.
EUR/USD also remains of interest as the pair tested and held at the 1.1500 level this week. I had looked into that backdrop last week as that’s a major psychological level and the mirror image of the DXY oversold backdrop on the weekly is an overbought reading in EUR/USD on the weekly. Bulls still have a door to run with the trend for another 1.1500 test, however, as the 1.1200 level remains viable support below the 1.1275 level that’s already held a bounce last week. European CPI on Friday morning ahead of NFP is another major driver on next week’s economic calendar.
For yesterday’s JPY video:
For the weekly webinar looking at that support in USD:
James Stanley’s video playlist:
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great stuff Stan