USD/JPY To Trade With Upward Bias
Asia-Pacific exchange net America 2010-02-04 08:11:34
USD/JPY to trade with upward bias amid broad-based USD strength (ICE spot dollar index up 0.5% at 79.41 last) as expectations increase Fed will lift interest rates sooner than previously forecast after upbeat U.S. January ADP national employment report (private-sector jobs fell 22,000 for smallest drop since February 2008, beating forecast for 30,000 decline) and rise in U.S. ISM non-manufacturing composite index to expansionary 50.5 in January from December''''s 49.8 (although below 51.0 forecast). No strong cues for JPY-funded carry trades from Wall Street as U.S. stocks closed mixed (DJIA off 0.26%, Nasdaq up 0.04%) while VIX fear gauge edged up 0.56% to 21.6. USD/JPY also supported by higher U.S. Treasury yields, USD demand for import settlements; but topside limited by Japan exporter sales, caution before tomorrow''''s U.S. non-farm payrolls report. Data focus: 1330 GMT U.S. 4Q non-farm productivity & unit labor costs, 1330 GMT U.S. Jan 30 weekly jobless claims, 1500 GMT U.S. December factory orders, 1500 GMT Treasury Secretary Geithner testifies in Washington. USD/JPY daily chart positive-biased as stochastics rising from oversold; MACD staging bullish crossover against its exponential moving average; 5-day moving average staging bullish crossover against 15-day. Resistance at 91.28 (yesterday''''s high); breach expose upside to 91.87 (Jan. 21 high), then 92.04 (Jan. 14 high), 92.43 (Jan. 12 high) and 92.67 (200-day moving average). Support at 90.50 (hourly chart), then at 90.06 (yesterday''''s low); breach would temper near-term positive outlook, targeting 89.77 (Monday''''s low), then 89.56 (Friday''''s low) and 89.11 (Jan. 27 low).