USD/JPY made an impressive reversal today rising above the 114.00 level in morning NY trade. The pair is being seesawed by US political news as market try to absorb the impact of new tax reform proposals. For now, it’s not clear if the tax legislation will indeed be stimulatory to the economy, but market’s focus will turn to tomorrow’s NFP and wage data.
The forecast is for a very large rebound in jobs after a hurricane leaden September. However, analysts may be overestimating the rebound and the market could be setting itself for disappointment. Although US data has been generally strong there is little indication that job growth surged this month.
The miss could take USD/JPY once again below the 113.00 level and set up a triple top in the pair as the 115.00 level once again proves to be a cement ceiling. If however, it breaks the 115.00 level USD/JPY could be on the way to a new uptrend.
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