USD/JPY prints fresh daily highs above 111.20 amid a stronger US dollar

  • US Dollar extended gains on the back of US data and Fed’s rate hike outlook.
  • USD/JPY bounced sharply and turned positive for the week.

The USD/JPY pair is sharply higher on Friday and it has been able to erase weekly losses on the back of a rally of the US dollar across the board following US employment data and comments from Fed’s Kaplan.

The US economy added 201K jobs during August, above the 191K expected. The number that boosted the greenback was the rise in average hourly earnings which rose by 0.4% (2.9% yoy, fastest rate since 2009). US yields jumped after the report. The 10-year climbed from 2.88% to 2.95%, the highest in a month.

Higher yields supported the upside in USD/JPY. The pair has been rising constantly after bottoming during the Asian session at 110.36 (2-week low). During US hours the pair printed a fresh daily high at 111.24. As of writing was holding near the top, 80 pips above daily lows.

The greenback erased most of the slide form levels near 111.80 to 110.35 (Sep 7 low), recovering key technical levels. With the recent recovery, the outlook continues to favor the consolidation phase in the wide range between 110.00 and 112.00.

USD/JPY Levels to watch

To the upside, resistance levels might be seen at 111.45, followed by 111.60 and 111.80. On the flip side, supports could be located at 110.95, 110.65 and 110.45.

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