USDJPY: Building up steam ahead of the NFP?

USD/JPY: 120.10
The dollar is generally higher today, despite some soft US data, after the ECB announcement,  with US$Jpy taking out the 120.00 resistance,so far reaching 120.38, before retreating a little towards the end of NY trade.A quiet session is now likely ahead of the US data, with the upside limited ahead of the 12 Feb high at 120.46, beyond which, it would then head onto, and probably beyond, 121.00. If we get a strong NFP, look for further advances towards the trend high at 121.85 (8 Dec), above which would see a run towards the 15 July 2007 high at 122.42. In the longer term, the target of 124.13 (17 June 2007 high) would appear on the horizon but will take time given the resistance levels sitting in between.

On the downside, back below 120.00 will find bids at 119.60 and again at around 119.40. I would be a bit doubtful of heading below here unless the NFP is very poor, but if wrong then a decline to 119.00 could be seen, below which further bids would arrive at last Thursday’s low at 118.62 low, where the daily Kijun and the base of the rising channel will again prop the dollar up. Below that lies the minor Fibo support at 118.40 (61.8% of 117.17/120.46), beneath which would head back to the recent 118.23 low and to the daily cloud top, now at 118.05. Below 118.00 would then head back into the previous 117/118 consolidation area and could even see the chance of a move towards the 116.40 area, although right now this looks over the horizon.

Buying dips remains the preferred strategy.

Economic data highlights will include:

Leading Index, Coincident Index.

Meta Trader – AxiTrader USD/JPY: 4 HourYen

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