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Stops for the pair will have to be placed under ¥118.00 and I feel around ¥117.60 is the 61.8% retracement of the recovery from December 16 lows to December 23 highs.
While the trade is slightly ahead, it didn’t get off to a great start and remains a touch below the uptrend support line, which has been in place since October last year. However, the fundamentals are still quite sound, with US data steaming ahead and the Fed remaining on track for lift-off around the middle of this year.
All signs continue to point towards a firmer greenback. The next key reading will be the official non-farm payrolls on Friday, which is expected at 241,000 with unemployment dropping to 5.7%.
Initial targets for the trade will be to ¥121.00 and I will update this as the trade progresses.