As the US Dollar Index (DXY) continues its bullish ways, the Dollar is beginning to extend its gains against the Japanese Yen. In addition to shorting pairs like EURUSD, traders should also look to take longs for USDJPY and USDCAD.
USDJPY had spent much of 2020 in a downtrend that was largely fueled by the pandemic. Since entering 2021, the pair has established a respectful uptrend on the higher time frames. Price recently cleared this past summer’s high with ease. The next target is the high of 2020 which is at 112.200.
After attaining 93.200, the DXY has pulled back below this level. This is normal price action as price commonly revisits a key level to reject and then to continue the original trend. For the short-term, the next target for the index is the high of the week at 93.400. In the long-term, 93.900 is still the target.
This morning’s ADP job numbers came out slightly worse than forecasted as 517,000 jobs were added versus the forecast of 552,000. This is still an incredible result considering the previous result was 176,000 jobs added. It’ll be interesting to see what the NFP numbers may look like and the effect they’ll have on the markets.