It was a relatively quiet morning for the USD/JPY. February current account figures from Japan drew interest this morning. However, trading volumes are on the light side, with several markets closed for Easter Monday.
The current account balance rose from a ¥1.989 trillion deficit to a ¥2.197 trillion surplus in February. Economists forecast a ¥2.536 trillion surplus. However, the adjusted current account surplus jumped from ¥20.360 trillion to ¥108.920 trillion versus a forecasted ¥1.430 trillion.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
While the stats drew interest, further market reaction to the US Jobs Report and increased bets of a 25-basis point Fed interest rate hike supported a USD/JPY breakout this morning.
Later this morning, consumer confidence figures from Japan will also be in focus. However, the numbers are unlikely to force a dollar retreat.
USD/JPY Price Action
This morning, the USD/JPY was up 0.39% to 132.646. A mixed start to the day saw the USD/JPY fall to an early low of 131.832 before rising to a high of 132.649. The USD/JPY broke through the First Major Resistance Level (R1) at 132.501.
The USD/JPY needs to avoid a fall through R1 (132.501) and the 132.012 pivot to target the Second Major Resistance Level (R2) at 132.865. A move through the morning high of 132.649 would signal a bullish USD/JPY session. However, Fed chatter must support an extended USD/JPY breakout.
In the case of an extended rally, the bulls would likely test resistance at 133.00 but fall short of the Third Major Resistance Level (R3) at 133.718.
A fall through R1 and the pivot would bring the First Major Support Level (S1) at 131.648 into play. However, barring a dollar sell-off, the USD/JPY pair should avoid sub-131.5 and the Second Major Support Level (S2) at 131.159. The Third Major Support Level (S3) sits at 130.306.
A USD/JPY move through the 200-day EMA (132.770) would support a breakout from R2 (132.865) to give the bulls a run at 133. However, a fall through the 100-day (132.335) and 50-day (132.017) would bring S1 (131.648) into view. A fall through the 50-day EMA would send a bearish signal.
The US Session
Looking ahead to the US session, it is a quiet day on the US economic calendar. There are no US economic indicators for investors to consider.
The lack of stats will leave the US Jobs Report and hawkish Fed bets to deliver USD/JPY support. However, investors should track Fed chatter throughout the session.