New cycle highs for USD/JPY

Greenback strength continued supported by positive data including the ISM manufacturing PMI, construction spending and personal income.

USD
Source: Bloomberg

This manufacturing print was the first gain in manufacturing in seven months. Treasuries sold off and the USD gained ground against the yen, euro, pound and aussie. USD/JPY traded as high as 124.92 (12-year high) and this pair seems unstoppable at the moment. The momentum is clearly in the bulls favour and traders are quite happy to hold on to positions. The key break to the upside for the pair took place on May 19 and it’s been one-way traffic ever since. Traders already in a long position will probably be looking to trail stops higher and keep tracking the move. For traders not already in the position, pullbacks into 122.00 present the best opportunities for longs. There is also minor support in the 124.00 region to keep an eye on. Heading into Friday’s payrolls numbers I feel traders will be eyeing buying opportunities.

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