USDJPY: Defying gravity at multi year highs. More to come? by Jim Langlands

The never ending rise of US$Jpy continued on Friday following the strong US jobs data, reaching the target of 121.68 at the  22 July 2007 high, closing slightly below there.Despite the dailies being overbought, it looks as though the dollar has the legs to continue towards the 15 July 2007 high at 122.42. In the longer term, the target of 124.13 (17 June 2007 high) is getting a lot closer, but will take time, given the resistance sitting close by.

The downside will now find buyers at 121.00, at 120.50 (minor) and then again at the important 120.00 level, where rising trend support also lies. I don’t think we are heading below here now for quite a while, but if wrong, stops would be triggered and would take the dollar back down towards 119.60 (100 HMA) and possibly to 119.25 (daily Tenkan).

Eventually I think the dollar is heading a lot higher so continue to trade from the long side, but leave room to buy dips.

Economic data highlights will include:

M: Q3 GDP, Current Account, Trade Balance

T: Consumer Confidence, Eco Watchers Survey

W: Machine Tool Orders

T:

F: Industrial Production, Capacity Utilisation.

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