USD/JPY: Technically bullish, further gains on a break above of the daily high at 105.80

The USD/JPY pair has continued to advance in slow-motion at the beginning of the day, reaching a fresh weekly high of 105.80. At the time of writing, the pair trades in the 105.70 price zone while bulls are poised to push dollar/yen towards 106.26, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“The dollar managed to recover some ground after the first US presidential debate. It didn’t lack entertainment for watchers, but was clearly mirroring what’s going on in the US: a political chaos ruled by anger. As per its effects on the financial markets, US President Trump refused to say that he would accept the election results is weighing on the market mood.”

“Japan published August Retail Trade, which beat expectations, by falling by just 1.9% YoY. The preliminary estimate for Industrial Production indicated a modest monthly improvement, although the year-on-year reading resulted at -13.3%, worse than the -10% expected.”

“The US will publish today the final version of Q2 GDP, foreseen unchanged at -31.7%. It will also release the ADP survey on private jobs’ creation, foreseen at 650K in September from 428K in the previous month.”

“USD/JPY is bullish according to intraday technical readings, still lacking follow-through. The 4-hour chart shows that technical indicators advance within positive levels, although the RSI remains below its previous weekly high. The pair, in the meantime, remains trapped between moving averages, with the sellers around the 200 SMA. Anyway, the risk is skewed to the upside, with further gains expected on a break above the 105.80 daily high.”