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USDJPY Prints Fresh 2023 Highs At 146.63

FOREX
  • Despite some volatility in the aftermath of Fed Chair Powell’s Jackson Hole speech on Friday, the USD index remains close to unchanged on Friday, as we approach the week’s close. Slightly higher front-end yields in the US have placed some moderate downward pressure on the Japanese yen, prompting USDJPY to post a fresh yearly high at 146.63.
  • With Jerome Powell providing little surprising information for markets, the USD completed a volatile spin cycle before general strength saw the DXY move to fresh trend highs just below 104.50. USDJPY briefly pierced a key short-term resistance level between 146.56/59, representing the August highs and the high dating back to November 10, 2022 before the lower than expected US October CPI data. However, with momentum waning ahead of the weekend, the pair settled back around 146.30.
  • Overall, the uptrend in USDJPY remains intact and the latest pullback appears to have been a correction. Moving average studies are in a bull mode condition, highlighting an uptrend. The focus above will be on 147.49, a Fibonacci projection. Support to watch moves up to 144.39, the 20-day EMA.
  • The Euro faced selling pressure through Asia-Pac hours and across the European open, resulting in a break below the key 200-dma support of 1.0804 (last broken below in Jun'21). EUR/USD then tested the base of the bull channel drawn off the March lows at 1.0769, before reverting to the 1.0800 mark ahead of this afternoon’s main event. In similar vein, a test of session lows following Powell’s speech was once again well supported and the pair slowly edged back above the 1.0800 handle once more ahead of the close.
  • It is worth noting there is a UK bank holiday on Monday and the key data point next week will be the release of US non-farm payrolls on Friday.
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