USD/JPY outlook: Dollar gains traction, eyes Powell's speech for more signals
|The USDJPY jumps on Wednesday after better than expected US Q3 GDP data offset negative ADP private sector employment report, while markets await the speech from Fed Chair Powell late r today, to get more clues about the central bank’s future action which would influence dollar’s direction.
Powell is expected to confirm Fed’s view that interest rates will need to rise further, targeting the terminal rate, which is still undetermined as Fed revised higher its initial estimation of the highest rate.
Fresh strength emerges after a multiple failure to clearly break pivotal Fibo support at 138.62 (61.8% of 130.39/151.94 advance, adding to a bear-trap and also formation of a higher base on daily chart.
Bulls pressure pivotal 140 resistance zone (10DMA / psychological), break of which will be needed to add to positive signals and expose 100DMA (141.22) and key barrier at 142.25 (Nov 21 lower top).
Technical studies show still fully bearish picture on daily chart, although 14-d momentum is in steep ascend but still in the negative territory.
Failure to clear 140 barrier would keep larger bears intact, with extended consolidation likely to precede fresh push lower.
Near-term structure would improve on break of 140 resistance, however, reversal signal could be expected on acceleration through 142.25 and extension above pivotal Fibo level at 143.12 (38.2% of 151.94/137.49 bear-leg).
Res: 140.00; 141.22; 141.52; 142.25
Sup: 138.62; 138.32; 137.49; 135.81
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