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Another Surge Higher as Forex Chess Game Develops

The USD/JPY is trading within sight of highs not seen since the second week of January as a strong kick higher this morning challenges speculative considerations.


If a trader has been able to survive the last few days of pursuing the USD/JPY, they have likely been on the correct side of the move higher, or have used adequate risk management. As of this writing the USD/JPY is moving fast and is near the 131.785 mark. Speculators are urged to check USD/JPY prices as they read this article to compare values due to the significant amount of volatility that is currently being displayed.


The yen is a popular asset during turbulent times.

When the USD/JPY opened for trading this morning it gapped from 131.200 to 131.600 without anything in between. An early high was achieved near the 132.500 vicinities in short order. After this huge surge higher compared to the lower values seen on Thursday of last week, when the USD/JPY was trading near the 128.100 ratios, speculators should be very cautious. However, the price action in the USD/JPY is also compelling and might attract traders who believe they have a grasp on the behavioral sentiment that the currency pair has displayed the past handful of days, feeling ready to play a speculative game.

USD/JPY Reacted to the Strong U.S Jobs Numbers

The higher move this morning in the USD/JPY continued the strong climb in the Forex pair which developed late on Friday. The better-than-expected Non-Farm Employment Change statistics from the States certainly caused a flurry of buying in the USD/JPY.  

Early trading this morning also fed on the reaction of bullish sentiment, which likely was not able to fully be displayed in the USD/JPY because the jobs numbers were published late on Friday in Japan and some Japanese financial houses may have not had fully functioning trading desks at those hours. The new short-term highs early this morning in the USD/JPY, which had not been seen since the 11th of January, could be a reflection of final buying positions being made as a reaction to Friday’s U.S data.

USD/JPY will be a Speculative Chess Game over the Next Few Days

  • The 131.600 level should be monitored closely by speculators today. If this level proves vulnerable and the USD/JPY moves lower, it may be an indication the USD/JPY has been overbought in the short-term
  • Speculators need to be careful because sentiment is certainly nervous. The early morning highs in the USD/JPY seem to have been overdone, but it doesn’t mean the USD/JPY cannot go higher in the near term.

Traders who are tempted to be contrarians and fight the short-term trend higher may be proven correct eventually. However, the question is if they will be proven right in the near term. Selling the USD/JPY may feel like the wager that should be made for some, but cautious traders may want to wait for support levels near the 131.600 and 131.500 levels to falter first to see if they can then jump onto momentum that is potentially showing signs of slightly more USD/JPY selling to come. Narrow-take profits and conservative stop losses will be important today and tomorrow. Dangerous forex conditions exist.

USD/JPY Short-Term Outlook:

Current Resistance: 132.010

Current Support: 131.510

High Target: 132.350

Low Target: 130.580


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