The greenback keeps strengthening on the Japanese yen. Until Monday, USDJPY has been rallying for five days.

US manufacturing activity has boosted the USD. Institute for Supply Management reported that August index was up to 51.5 from 49.4 in July. FYI, above 50 indicates expansion, below 50 indicates contraction.

On the contrary, report from Japan showed that there was stagnation at the manufacturing sector in the third quarter. Tankan index from the Bank of Japan showed the number of 6 for the third quarter, same with the previous quarter. Number above 0 shows expansion and below 0 shows contraction.

Technical Analysis:

USDJPY currently is in upward trajectory, testing intraday key resistance at 102.076. If the resistance breaks, USD/JPY possibly will continue its rally up to 102.392-102.588. Note that hourly stochastic and CCI are overbought. Therefore, as alternative strategy, you might want to look for bullish signal confirmation on a pull-back move to within 101.760-101.248 with 102.076 as target and 102.392 in extension.

Be careful if the price managed to break support 101.248 because it will turn the intraday bias into bearish and possibly will be followed by bearish move to 101.052-100.736.

Trading Plan:

– Buy on break of 102.076; target at 102.392 or 102.588
– Buy on bullish signal confirmation within 101.760-101.248; target at 102.076 or 102.392


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