USD/JPY is headed for a positive close for the week having fallen just shy of the 114 handle with a high of 113.99 so far on the session and week.
USD/JPY has made a recovery from 111.03 earlier in the week on dips within the recovery that commenced on the 11th of this month from the Feb downtrend that started just below the 200 dma at 120.96. the dollar has made a comeback on better data and risk apatite while investors begin to look for a return on their otherwise idle capital parked in safer havens and the Yen has been unwound to an extent. The latest set of key US data came today in the Q4 GDP and this was revised higher on change inventory valuation method.
Next week, of course, markets will be turning their attention to nonfarm payrolls for Feb in the US. “US labor market momentum remains stuck in low gear, with the economy expected to add a relatively modest 168K jobs in February. This will only be marginally higher than the equally disappointing 151K jobs created the month before, and it remains well below the relatively brisk 230K average monthly pace of jobs growth last year. The unemployment rate should rise modestly, climbing to 5.0% from 4.9%. The overall tone of this report should be weak, reflecting the slowing in underlying US economic momentum,” explained analysts at TD securities.
USD/JPY is in recovery mode with RSI (14) on the daily sticks at 37 offering plenty of scope for further upside while spot is placed in highly positive territory, over 100 pips above the pivot down at 112.63, through R2 at 113.77 and on a break of 114.00, R3 is at 114.50 ahead of the 20 dma at 114.74.