The improving U.S. economy and the threat of an early interest rate hike by the U.S. Federal Reserve helped boost the USD/JPY in July. This developing trend is expected to continue if the U.S. economy continues to be supported by strong jobs and inflation data in August.
The main trend is up on the daily chart. Last month’s price action
suggests the Forex pair is set up to resume that uptrend. The main range
is 93.783 to 105.434. The retracement zone formed by that range is
99.61 to 98.23. This is the major support area along with uptrending
angles at 100.78 and 100.13.
Overtaking the downtrending angle at 101.93 this month is a sign of
strength. The short-term range is 105.434 to 100.749. The pivot price
created by this range is 103.09. Overtaking this pivot will put the
USD/JPY in a strong position to continue the rally.
The next upside objective is 103.68. This is the last major resistance angle before the main top at 105.434.
The tone this month will be determined by investor reaction to the pivot
at 103.09. This price is controlling the short-term direction of the
market. The catalyst behind the move will be the continuing improvements
in the U.S. labor market and inflation rate.
