USD/JPY bulls say “checkmate” to the bears with Fed rally; 106.42 next upside Fibo target

FXstreet.com (Barcelona) - The USD/JPY blew through all key bearish resistance levels Wednesday and did so in convincing fashion by closing near the highs. While overbought, the cross appears headed to 106.42 next.

USD/JPY traders to monitor Japanese and US data Thursday

In addition to seeing if the greenback manages to hold its technical strength Thursday, USD/JPY traders will be watching the following data points out of Japan and the US:

• Japanese All Industry Activity
• Japanese Coincident Index and Leading Index
• US Weekly Jobless Claims
• US Conference Board Leading Indicators
• US Existing Home Sales
• US Philly Fed Manufacturing Survey
• US 7-Year Note Auction

Technical outlook for USD/JPY

Technicians now say the USD/JPY is clearly in the midst of a third wave move higher that should take the cross up to points north of 106. The reason for the change in outlook is clearly tied to the breakout above 103.54 and 103.73 key resistance levels. Those levels are now the first two support levels for the cross.