US Dollar Strength Surging to New Recent Highs
The US stock market continued to make new record highs since Tuesday and is having a positive effect on the strength of the US Dollar. With the key resistance level of 114.00 firmly in its sights, we believe only unexpected commentary from the FOMC statement tonight will slow down the USDJPY’s advance higher.
The USDJPY behaved as expected in the last 24 hours, moving down to the 111.20 role reversal level, and launching long out of the congested area highlighted in the gold band on the chart above. With positive news from the FOMC statement, we expect the USDJPY to continue long over the coming days and test the next key resistance level at 114.00.
The release of the BOJ Policy Rate earlier today confirmed the expected ‘no change’ to the existing rate of -0.10%. Traders should look out for the Federal Funds Rate announcement tonight, along with the US Unemployment Claims numbers to see if either can add any further strength to this weeks’ upward momentum on the USDJPY.