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  • A combination of factors assisted USD/JPY to gain traction for the fourth straight session.
  • The USD built on its recovery from two-year lows and remained supportive of the uptick.
  • The upbeat market mood undermined the safe-haven JPY and provided an additional boost.

The USD/JPY pair edged higher through the first half of the trading action on Thursday and shot to fresh weekly tops, around the 106.35 region in the last hour.

The pair prolonged this week’s positive move and continued gaining traction for the fourth consecutive session on Thursday. The momentum was supported by sustained US dollar buying and was further supported by the prevalent upbeat market mood, which tends to dent the Japanese yen’s perceived safe-haven status.

The greenback built on its corrective bounce from two-year lows, led by reviving hopes of the US economic recovery. The USD bulls largely ignored Wednesday’s weaker than expected ADP report, which showed that the US private-sector employers added 428K jobs in August as against consensus estimates pointing to a reading of 950K.

Meanwhile, the global risk sentiment was supported by the prospects of additional US fiscal stimulus and got an additional boost from upbeat Chinese Caixin Services PMI. The risk-on flow was reinforced by a pickup in the US Treasury bond yields, which further underpinned the greenback and remained supportive of the positive move.

Moving ahead, market participants now look forward to the release of the US ISM Non-Manufacturing PMI for some impetus. The data will influence the USD price dynamics and produce some short-term trading opportunities later during the early North American session. The key focus, however, will remain on Friday’s US monthly jobs report (NFP).

Technical levels to watch

 

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