USD/JPY: Bulls to gain ground on a break above 104.50

USD/JPY is trading around 103.80, retreating from a fresh weekly high of 104.08, as the pair is still unable to advance beyond 104.00. According to FXStreet’s Chief Analyst Valeria Bednarik, bulls will have a case if the 104.50 barrier is broken.

See – USD/JPY to slump below the 100.00 level – MUFG

Key quotes

“Demand for the American currency surged mid-week, amid hopes things will start falling into place this year. Coronavirus immunization through different vaccines lifts odds for an economic comeback in the second semester of the year, while unprecedented monetary stimulus has chances of being increased. Finally, and after some turmoil in the US, President Donald Trump announced an upcoming ‘orderly transition’ on January 20.”

“The US will publish its Nonfarm Payrolls report, expected to show that 71K new jobs were added in December. The unemployment rate is foreseen at 6.8% from 6.7% in the previous month. Meanwhile, US Treasury yields maintain their ascendant trend, reaching levels last seen before the pandemic unwound back in March 2020.”

“The 4-hour chart indicates that the bearish potential is quite limited. A major resistance area is located in the 104.50 price zone, a descendant trend line coming from March 2020 high. Bulls will have a case if the USD/JPY pair manages to close a day above it.”