USD/JPY Rallies To 6-Year High As Fed Tapering Continues

FXOpen

The US Dollar (USD) continued its record break spree against the Japanese Yen (JPY) on Thursday, increasing the price of USD/JPY to more than 108.50 following the Fed monetary policy announcement. The bias remains extremely bullish due to Higher High in the ongoing upside rally.

Technical Analysis

As of this writing, the pair is being traded around 108.59. A huge hurdle can be seen near 110.65, the high of 2008 ahead of 112.66, the 76.4% fib level as demonstrated in the following chart. The long term bias will however remain bullish as far as the 100.82 support area is intact.

usdjpy

On the downside, the pair is likely to find a support near 106.80, the low of September 16 ahead of 105.57, the 61.8% fib level and then 105.00, the psychological level. The pair which is being traded at the six-year high would threaten the 2007-high if 110.65 is broken.

US Jobless Claims

The number of people who applied for the jobless incentives during the week ended on September 12 remained 305K as compared to 315K in the month before, the median projection of different economists say. The US labor department will release the actual jobless claims figure today in the New York Session. Generally speaking, higher jobless claims are considered negative for the economy, thus a worse than expected actual outcome will be seen as bearish for USD/JPY and vice versa.

Conclusion

Keeping in view the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy if the price leaves a bearish pin, shooting star or bearish engulfing candle on the daily chart. Not to mention, Yellen’s speech which is due today could also add to the ongoing bullish momentum spurred by yesterday’s monetary policy announcement by the Federal Reserve. 

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