USD/JPY Exit Its Range Soon?| Daily Forex Analysis•Olimpiu Tuns

USD/JPY rebounded due to the USDX and Nikkeis further growth but a larger leg higher is far from being confirmed. The pair moves in range on the Daily chart, an upside breakout could bring a great long opportunity.

Yesterday, the dollar has continued to increase even if the ADP Non-Farm Employment Change has come in worse than expected at 428K, way below 1250K estimated. Now, USD/JPY is traded at 106.25 level, it remains to see how it will react after the US data releases later today.

ISM Non-Manufacturing PMI may drop from 58.1 to 57.0 points signaling the expansion slowdown, the Final Services PMI is expected to remain steady at 54.8 points in August, while the US Trade Balance could drop to -58.2B.

The Unemployment Claims are expected around 955K in the last week, better than expected data will boost the greenback. More gains reported by Nikkei and USDX should help USD/JPY to climb higher as well.

● Nikkei At New Highs!

JP225 index jumped above 23431.04 former high signaling strong buyers. It has opened with a huge gap up reaching the 23590.00 level. Its traded in the red at the time of writing, but the current decline could be only a temporary one.

Technically, the index is still expected to approach and reach the 24115.95 higher high after the breakout of 23185.85 static resistance. A further bullish run should weaken the Yen, so the currency could depreciate versus its rivals.

The upper median line (UML) could attract the rate, thats why USD/JPY could develop a strong upside movement in the upcoming period.

● USD/JPY Still Undecided!

USD/JPY has bounced after the failure to touch the 105.10 former low. It is still trapped between 107.06 and 105.10 levels, only a valid breakout from this range will give us the change to open a trading position.

The pair has found support on the median line (ML) and now it should reach the upper median line (UML) of the descending pitchfork. A breakout above the UML and above 107.06 level suggests buying as the rate will continue to move higher.

On the other hand, a failure to reach the upper median line (UML) or a false breakout above it, rejection, followed by a drop below 105.10 will bring a short opportunity. Personally, I still believe that USD/JPY will register an upside breakout after the latest developments.

USD should appreciate further if the US data will come in line with expectations. As you already know, the US NFP, Unemployment Rate, and the Average Hourly Earnings will be released tomorrow. These high impact data along with todays figures will definitely bring a clear direction on the USD.

The breakout of 107.06 could announce a bullish momentum up to the first warning line (WL1), around 109.00 psychological level. USD/JPY is somehow expected to reverse after the failure to close again below the median line (ML) and after its incapacity to retest the former lows.

[About the Author]

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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