US Dollar Rallies Strongly Against The Japanese Yen

The USD/JPY moved sharply higher overnight.  Today (Tuesday) is the end of year for Japan and the period can solicit unusual currency flows for the pair.  In addition, last night the monthly employment statistics for the  month of February was released and it showed increasing weakness.  The Unemployment Rate rose to 4.4% from 4.1% last month.  The rate has increased from 3.8% in October.

The Job to Applicant Ratio a measure of the depth of the job market fell sharply to 0.59.  This says that for every Applicant looking for work, there is only 0.59 jobs available.  As a result, too many unemployed people are chasing too few jobs.  The Unemployment Rate follows the Job to Applicant ratio.  When it falls, the unemployment rate rises.  When it rises, the Unemployment rate will fall (see chart above).

From a technical perspective, the USD/JPY moved above the 100 hour MA at the 97.78 level and moved higher today .  The correction came down to the 97.86 where buyers against the moving average pushed the pair up to new highs on the day.  The high is currently at 98.64.

As what often happens in a trend move, the market will follow the 100 bar MA on the 5 minute chart.  The MA has tested the MA no fewer than 8 times.  The current level comes in at the 98.30 level.  A break should solicit some profit taking for the pair.  Watch the level.

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