USD/JPY broke out last week, rising above its 100- and 200-DMAs, but it will need some fuel to carry it farther nL1N20R0CB, which raises the stakes for this week's ISM services and non-farm payrolls reports. It's currently facing a thicket of price congestion from Friday's 112.08 high to last year's 114.55 peak.
Friday's high completed a 76.4 percent retracement of the 114.55-104.10 2018-19 slide.
It is pivotal on a closing basis into Tuesday's ISM and Friday's U.S. jobs report, both of which are forecast to be dollar-bullish.
If these reports reinforce the Fed's current view that the U.S. economy is basically solid nL1N20M1AG, and not in need of rate cuts, it might keep Japanese demand for higher yielding U.S. debt firm enough to grind through USD/JPY's Q4 congestion.
If the U.S.
and China reach a trade deal later this month, it would support this year's rebound in risk-taking, some funded with cheap yen.
Whether that, a steady Fed, a soft or delayed Brexit and further Chinese fiscal stimulus are enough to revive global growth and risk-taking remains to be seen -- recent IMM specs hope so nL1N20O1M3.
That question will become paramount when and if USD/JPY retests range highs below 115 dating back to early 2017.