USD/JPY rises beyond 113.00. Another run higher is expected until the end of the year, but Westpac analysts are more hesitant in their projection for 2022. In the short term, 113.00/50 is projected to remain a significant market cap.
Nevertheless, given that the Fed has now begun its taper, is expected to consider speeding it up or raising inflation indicators at the December meeting, and US data is coming in far above forecasts, it is anticipated that the USD will rise in the next few weeks.
Experts still view 115/116 as possible until mid-December, but markets are likely to remain jittery in the short term as they await data from important drug firms running antibody studies on the new Omicron strain.
Given the magnitude of the advance, analysts would be wary of a USD correction beyond the end of December. With both fiscal and monetary policy expected to become less favorable, and US cases expected to accelerate, further USD gains appear less likely.
Experts return to a neutral one-week leaning, a favorable month prognosis, and a balanced three-month view.
Layout Of Technical Information
USD/JPY CHART Source: Tradingview.com
In the early European period, the USD/JPY pair extended its intraday advances and reached a new daily high in the 113.25 zone.
The pair found some footing again north of the mid-112.00s and drew new purchasing on Thursday amid a solid improvement in global risk sentiment.
Review Of The Essentials
Despite concerns over the new Omicron form of the coronavirus, a broadly upbeat tone in the financial markets damaged the relatively secure Japanese Yen. This, in turn, was viewed as a crucial aspect that provided some stability to the USD/JPY pair.
The US Dollar, on the other foot, struggled to acquire traction and did nothing to support the major. However, the anticipation of the Fed’s tightening policy more aggressively functioned as a boost for the Dollar.
This, combined with rising US Treasury bond rates, attracted optimistic traders and supported the USD/JPY pair’s rise over the 113.00 round number.
It remains to be seen, however, if bulls can profit on the advance or if the USD/JPY pair encounters new supply at elevated amounts.
Concerns about the economic consequences of the new, more transmissible Omicron form might dampen any bullish market move and limit gains for the USD/JPY pair.
As a result, any further move up may encounter firm resistance at the overnight swing high, around 113.60-65.
Market players are now looking ahead to the US economic calendar, which includes the publication of Challenger Job Cuts as well as the typical Weekly Initial Unemployment Claims data.
This, combined with remarks by a plethora of key FOMC members, will affect the USD and add some momentum to the USD/JPY pair. Traders will continue to draw cues from the coronavirus story to seize some short-term chances.