USD/JPY has been residing at the edge of 108.50-109.20 support area for a few days from where it is expected to push higher in the coming days. Ahead of the upcoming NFP, Average Hourly Earnings, and Unemployment Rate data from the US this week, certain volatility is expected to be observed in this pair.
Today, Japan's SPPI report was published with an increase to 0.9% which was expected to be unchanged at 0.5%. The positive economic report heled JPY to sustain some momentum against USD until now that is expected to result in certain correction in the market this week. This week Japan's Unemployment Rate and Retail Sales reports are going to be published which are expected to encourage provide the definite momentum in the pair for the coming days.
On the USD side, due to observance of Memorial Day, all the U banks and financial institutions are closed, so no impact economic report or event is stated in the economic calendar today. The market is expected to be quite slower in terms of USD gains today with no definite pressure on the upper side. This week ahead of NFP, a series of high impact economic reports like Consumer Confidence and Prelim GDP is going to be published that is expected to inject more volatility in the pair throughout the week.
As for the current scenario, certain volatility and correction is expected in this pair throughout the week. JPY has been quite positive so far today. The USD response to the upcoming high impact reports and events will be the key for a further dynamic of this pair. To sum up, USD is expected to gain more momentum against JPY until the end of this week.
Now let us look at the technical view. The price is currently being intersected by the dynamic level of 20 EMA while residing above the support area of 108.50-109.20 area with a daily close. After the bearish divergence pushing the price lower recently, a certain retracement towards 110.50 is expected before the bearish momentum strikes again. As the price remains above 108.50 with a daily close, certain bullish retracement is expected in this pair.
