Over the past 24 to 48 hours, the USD/JPY currency pair has climbed from yesterday’s closing price of 156.796 to reach near two-week highs at 156.955. This surge is primarily driven by robust U.S. jobs data, particularly the recent JOLTS job openings report that exceeded expectations, reinforcing market bets on further Federal Reserve rate hikes.

Moreover, attention is centered on the upcoming Fed rate decision, with investors broadly anticipating a hawkish stance to tackle inflationary pressures. This dynamic has strengthened the U.S. dollar against the Japanese yen, pushing USD/JPY higher. The yen has also been pressured by increased economic uncertainty following a major earthquake in Japan, undermining its safe-haven appeal.

For the average investor, the recent price action encapsulates the dual impact of a strong U.S. economy and challenges facing the yen. In simple terms, strong U.S. labor market data has made the dollar more attractive, while Japan’s struggles due to natural disasters and lackluster economic signals have weakened the yen, setting the stage for a continued rise in the USD/JPY exchange rate.

Daily Chart

The daily chart shows a clear uptrend in USDJPY with prices consistently above both the 50-day and 200-day moving averages, indicating strong medium to long-term bullish momentum. The Bollinger Bands are widening, reflecting increased volatility. The MACD remains in positive territory with a strengthening trend, supporting further upward movement. Recently, a bullish flag pattern has formed between 156.50 and 157.00; a successful breakout above 157.00 could target the yearly high at 158.857.

1H Chart

The hourly chart over the last 3-5 days shows USDJPY rebounding from a low near 155.70 and continuing an upward move. Short-term moving averages align in a bullish formation, and the latest candlestick shows a bullish engulfing pattern, signaling likely upward momentum in the next 24 hours. The Bollinger Bands are trending upwards with multiple touches to the upper band, indicating strong buying pressure. The MACD has just crossed bullishly, suggesting an acceleration of momentum is possible in the short term.

Technical Trend:  USDJPY is currently in a ‘Decisively Bullish’ trend, though traders should be aware of potential volatility spikes around the forthcoming Federal Reserve interest rate announcement.

From a technical perspective, USDJPY demonstrates a strong bullish momentum with a bullish flag pattern on the daily chart that could herald further gains upon a breakout above 157.00. The hourly chart’s bullish engulfing candlestick and MACD golden cross reinforce near-term bullish sentiment. Volume has increased recently, supporting the uptrend. A decisive break above key resistance could lead to a swift run toward the yearly highs, especially if the upcoming Fed rate decision surprises to the upside for the US dollar.

Today’s global economic calendar in GMT+1 shows no major events directly impacting USDJPY. However, the focus is clearly on the US Federal Reserve rate decision scheduled later at 20:00 GMT+1 (04:00 HKT on December 11). This event is expected to cause significant price volatility depending on the Fed’s interest rate announcement and forward guidance. Other data releases from China and Europe have limited immediate impact on USDJPY. Traders should stay alert for market reactions surrounding the Fed decision.

Resistance & Support

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