The USD/JPY saw tremendous gains to the upside in the previous week’s trading session but topped out at 103.742 to form resistance. The pair later made some slight pull back trimming off gains from the strong rally after the U.S Employment statistics was released.
Data revealed the U.S. economy added far more jobs in February than markets were expecting, which fueled expectations for the Federal Reserve to continue winding down its stimulus programs, which weaken the greenback to spur recovery.
Weekly bias in the long term remains on the upside as MACD, Stochastic, RSI, EMA’s 21 and 55 on the 4hours charts are signaling a bullish continuation is expected. A clear break of 103.742 resistance should trigger resumption of the bullish trend and demand to 105.400 psychological zones is expected.
However, near term trend in the USD/JPY seems to be on the downside with a pin bar candle rejection pattern formed at the close of Friday’s trading session on the Daily charts. More supply to 102.467/102.168 supports (Fibonacci 50.0/61.8 retracement from 101.189 to 103.742) could be seen in the near term pictures before the markets resumes the current rally.
The dollar didn’t soar against its Japanese counterpart, as many investors have already priced in expectations for the Fed to continue winding down stimulus measures as the year unfolds.
Key Important economic indicators to watch out for in the coming week are the Japanese Monetary Policy Statement/ Press Conference scheduled on March 11, 2014 and also U.S Retail Sales scheduled on march 13, 2014.