FXStreet (Córdoba) – USD/JPY rallied more than 100 pips and reached a peak of 123.07 following news the US economy added more jobs than expected in October, which boosted expectations of a rate hike by the Fed in December.
However, following the knee-jerk spike, USD/JPY entered a consolidation phase just below 123.00 as investors continue to digest data. At time of writing, USD/JPY is trading at 122.90, recording a 0.97% gain on the day.
USD/JPY technical perspective
“The strong movement has left technical indicators in the 1 hour chart in extreme overbought levels, yet further advances are still likely, particularly of dollar’s buying resumes with the US opening”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical indicators head sharply lower, also in overbought territory, in line with further advances”.
As for technical levels, Bednarik locates next supports at 122.80, 122.50 and 122.20, while she places resistances at 123.20, 123.40 and then 123.60.
(Market News Provided by FXstreet)