OVERVIEW OF USDJPY Analysis

Key words
USDJPY breaks out of 158 bricks wall
U.S December Job report
USDJPY reaches six months high

FUNDAMENTAL VIEW of USDJPY PAIR

After the yuletide break, the greenback began on a positive note buoyed by favorable economic data that supported its status as a safe haven currency. The greenback gained momentum over the week, driven by positive data on Tuesday the 7th of January, as U.S. Job Openings exceeded forecasts and the ISM Services PMI's prices paid index surged, pushing the Dollar index (DXY) up by about 0.75%. Meanwhile on Wednesday the 8th, the ADP Non-Farm Payrolls report fell short of expectations, with an actual reading of 122k versus the forecasted 139k for December 2024. However, unemployment claims came in lower at 201k compared to 214k, which supported the USD.

POTENTIAL DRIVERS 

For the remainder of the week, market attention is on the U.S. jobs report for December 2024, set to be released on Friday the 10th at 5:30 PM GMT+4 (Dubai time). Average Hourly Earnings is forecasted at 0.3%, down from 0.4%. Non-Farm Payrolls (NFP) is expected to dip to 164k from 227k, while the unemployment rate is projected to stay at 4.2%. These data point is crucial and could significantly impact market movements, presenting both risks and opportunities. While next week, attention would tilt towards US CPI data release.

TECHNICAL ANALYSIS of USDJPY

Given the strength of the dollar, we can say that the USD/JPY analysis has maintained a bullish trajectory, currently consolidating around 158.03 at 1:30 GMT+4 (Dubai time), with a daily decrease of 0.19%. After Wednesday's rally, which pushed the pair to 158.55, marking a six-month high, the bullish momentum could drive the pair toward key levels at 159 and 160, followed by the significant resistance at 161.72. From a technical standpoint, on the 4H timeframe, the pair broke out of a range on Monday, January 6th 2025, with 155.98 serving as support and 158.00 as resistance (the brick walls). This breakout to the upside underscores the ongoing bullish momentum and strength of the USD.
            Currently, the price is trading above the EMA 50, which reinforces the bullish trend. Additionally, the RSI is positioned above the 50 level, further indicating potential for continued upward movement. This confluence of technical indicators suggests a strong bullish sentiment, with room for the pair to challenge higher resistance levels if the current trajectory is sustained. Conversely, if the dollar losses momentum as a result of upcoming data, we might see the bears taking the center stage with potential target around 157.37 and then 155.98 as per analyst.