Dollar rallies against a number of currencies, especailly safe haven yen.
Risk remains on the menu following last week’s big upsurge for US tech stocks, despite incoming economic data painting a bleak picture. But that 20.5 million drop in US nonfarm jobs for April was in fact a touch better than expected. Consequently, stocks remain supported and dollar bid. In fact, the US dollar has broken sharply higher, especially against safe haven yen today, ahead of the
key fundamental events later on in the week:
Source: TradingView and ThinkMarkets
The breakout looks impressive, but it might have gone a bit too high, too quick. So it may ease back a little before potentially continuing higher.
If the breakout on the USD/JPY can be sustained, the next potential objective is at around 108.20, where the 200-day moving average meets the 38.2% Fibonacci retracement level. Further upside targets include the retracement levels shown on the chart.
On the downside, old resistance levels such as 107.05 and 106.75 will be the key support levels to watch. These need to hold if the bulls are to remain in charge now.