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The US dollar traded higher recently against most major currencies, including the Japanese yen as the FOMC meeting minutes were on the positive side and lifted the dollar buyer’s sentiment. The USDJPY pair traded higher and surged above the 120.00 level and looks set for more gains in the near term. Today, the US Initial Jobless Claims, which helps in measuring the number of people filing first-time claims for state unemployment insurance will be released by the US Department of Labor. The market is expecting it to increase from the last reading of 268K to 285K. Let us see how the US dollar reacts if this expectation is met moving ahead.
There was a critical bearish trend line formed on the hourly chart of the USDJPY pair, which was breached during the Asian session. There was a release in Japan as well, which ignited a minor downside reaction in the Japanese yen. However, the pair stalled around the last high of 120.40 and is currently correcting lower. The broken trend line is acting as a support to the pair and we need to see how long it can protect the downside. Moreover, the 23.6% fib retracement level of the last leg from the 119.63 low to 120.37 high. So, in short there is a major support around the 120.20-10 levels, which might cause an upside reaction in the pair moving ahead.
If the USDJPY pair breaks higher and moves above the last high of 120.40, then it could test the 120.80-90 levels in the near term.
Overall, one might consider buying dips in the USDJPY pair as long as it is above the 120.10-00 levels.