The main reason for the small up-gap in the USD/JPY currency pair recently was a potential risk on mode within the financial markets after the Brexit summit over the last weekend delivered the first step to a deal between the EU and UK, even though prime minister May still has to convince her parliament on the 11th of December. On Wednesday the question is now whether USD/JPY can keep its current upside momentum and probably attack and re-conquer the region around 114.00 JPY. In this context the main focus lies on the data for the US economic growth rate for the third quarter of 2018. Numbers for the first estimate came in at an annualized 3.5 percent on quarter, beating market expectations of 3.3 percent.
Source: Economic Events 28 November 2018 – Admiral Markets’ Forex Calendar
If numbers for the second estimate today confirm the numbers back then, a following push higher in 10-year US-yields will most likely, due to the positive correlation between US yields and USD/JPY, push the currency pair with a first target around 114.00. But even if the data disappoints and USD/JPY goes for a re-test of Fridays’ closing price back below 113.00, the picture remains positive on a 4-hour-chart, as long as we trade above 112.70, though some more optimistic traders will probably extend this down to 112.30, the current November lows.
Source: Admiral Markets MT5 with MT5SE Add-on USDJPY 4-Hour chart (between 27 September 2018 to 27 November 2018). Accessed: 27 November 2018 at 11:00 PM GMT
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