Worries that the continuous surge in crude oil/energy prices will stoke inflation and derail the global economic recovery weighed on investors' sentiment. Adding to this, fragile US-China trade ties, China Evergrande’s debt crisis and a stalemate over the US debt ceiling triggered a fresh wave of the global risk-aversion trade. This, in turn, extended some support to the safe-haven Japanese yen and failed to assist the USD/JPY pair to capitalize on its early positive move. The fundamental backdrop seems tilted firmly in favour of bullish traders and supports prospects for additional gains. However, investors might prefer to wait on the sidelines ahead of Friday's release of the closely-watched US monthly jobs report (NFP) before placing directional bets. In the meantime, traders would take cues from Wednesday's release of the US ADP report. Apart from this, the US bond yields and the broader market risk sentiment might provide some impetus to the USD/JPY pair.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The USD/JPY has recovered, as it found support in the 110.82/110.90 zone. The following surge passed the resistance of the 55, 100 and 200-hour simple moving averages. On Wednesday morning, the rate had reached the 111.80 level. A continuation of the surge of the USD/JPY currency exchange rate could reach first for the weekly R1 simple pivot point at 111.93. Afterwards, the rate might test the resistance of the 112.00 level. However, if the pair ends the surge and begins to decline, it might find support in the 55, 100 and 200-hour simple moving averages and the weekly simple pivot point near 111.25.

USDJPY

Oct 06 2021