Morning outlook - USD/JPY surges towards updated weekly R1 at 113.36
Despite a certain volatility that was caused by a release of information on the US consumer spending, the pair continued to gradually climb to the top, as expected. In the first half of Monday, the rate is likely to cross the upper trend-line of a junior descending channel and continue to head towards the updated weekly R1 at 113.36. Such scenario is supported by the 55-, 100- and 200-hour SMAs as well as the weekly PP, which are all located below the current market price.
The only event that has a chance to push the currency pair in the opposite direction is a release of US ISM Manufacturing PMI at 14:00 GMT. Otherwise, the pair is projected to head to the north, fluctuating in a senior ascending channel.
Despite a certain volatility that was caused by a release of information on the US consumer spending, the pair continued to gradually climb to the top, as expected. In the first half of Monday, the rate is likely to cross the upper trend-line of a junior descending channel and continue to head towards the updated weekly R1 at 113.36. Such scenario is supported by the 55-, 100- and 200-hour SMAs as well as the weekly PP, which are all located below the current market price.
The only event that has a chance to push the currency pair in the opposite direction is a release of US ISM Manufacturing PMI at 14:00 GMT. Otherwise, the pair is projected to head to the north, fluctuating in a senior ascending channel.
In line with expectations, the Greenback continued to gain value against the Yen, breaking through the upper edge of a junior descending channel. The surge was mainly based on release of positive information on the US manufacturing activity. However, a combination of the 55- and 100-hour SMAs located near the lower support line of a dominant ascending channel additionally supported the above-mentioned soar.
Because of the hawkish Fed outlook, anticipation of Trump’s tax reform and other favourable fundamental background, the pair is expected to continue to head to the north.
However, there is a need to take into account that due to 48 pips advance just in three hours the Yen might force the pair to make a temporary rebound and restore some lost positions.