USD/JPY Buyers Push to Extend Rally Amid Positive U.S. Data

Market Overview

Monday’s trading session highlights renewed bullish momentum for USD/JPY as traders aim to push the currency pair higher amidst diverging economic prospects between the United States and Japan. The ongoing weakness in the Japanese economy, coupled with a strengthening U.S. outlook, has bolstered buying interest in USD/JPY. Specifically, a reduction in Japan’s current account surplus alongside an increase in money supply (M2) has weakened the yen, increasing its vulnerability in the market.

Meanwhile, positive economic data from the U.S. and expectations that the Federal Reserve may continue to adopt a more hawkish monetary policy stance have provided significant support for the dollar. This dynamic environment has led to heightened investor confidence in USD/JPY, spurring buyers to extend the recent rally.

Technical Analysis

On the one-hour chart, USD/JPY remains on a firm upward trajectory after breaking through the 153.665 level, marking a continuation of its bullish rally. The current price is consolidating in the upper half of the Bollinger Bands, which, alongside the upward sloping bands, points to ongoing upward pressure. Oscillators are reinforcing this bullish sentiment, with the RSI currently reading 68.32, indicating strong buying interest, albeit approaching overbought territory. The MACD indicator is also bullish, with a positive cross indicating momentum in favor of buyers.

Should USD/JPY continue to rise, immediate resistance lies at 153.883. A successful breach of this level would pave the way for higher targets at 154.018 and ultimately 154.236, which represent key resistance levels in the medium-term outlook.

However, on the downside, if the price retreats and falls below 153.312, the bullish outlook may become invalidated. This would open the door for a potential reversal, especially if sellers can capitalize on any shifts in risk sentiment or key economic releases.

Key Events to Monitor

Traders should closely monitor upcoming speeches by Federal Reserve officials on November 12. Hawkish comments could introduce further volatility in the dollar. Additionally, the NFIB Small Business Optimism Index in the U.S. and weak machinery orders data from Japan are key events that might contribute to additional yen weakness, thus further supporting USD/JPY.

Key Technical Levels Overview

Resistance Levels:

• Resistance 1: 153.883
• Resistance 2: 154.018
• Resistance 3: 154.236

Current Price: 153.802

Support Levels:

• Support 1: 153.761
• Support 2: 153.665
• Support 3: 153.530
• Support 4: 153.312

Conclusion

USD/JPY remains firmly in a bullish posture, supported by diverging economic fundamentals between the U.S. and Japan. Key resistance levels at 153.883 and above will be critical to maintaining the upward momentum.