USDJPY +0.93%

The USD continues rallying against the Japanese Yen; the uptrend started in early August and continued after a few pullbacks. The scenario is looking good for the USD, but that could change with the release of high-impact economic data from the USA and Japan later this week.

The US will announce the Job Openings and Labor Turnover Survey tomorrow; this economic indicator gauges the strength of the labor market in the USA, which has been holding up the US economy for the last few weeks. Experts anticipate a 10.475M figure; anything below that will hurt the USD. If we get surprised by a higher figure (unlikely but possible), the USD could strengthen across most major FX pairs.

We could start to see a US labor market decline, as Fed chair Powell said last week that monetary policy needs to be tight for some time to control high inflation, which means slower economic activity, GDP growth, and a decline in the labor market.

Japan will release Consumer Confidence on Wednesday; analyst consensus is a 0.8 increase from the previous 30.2. The figures are still below 50, meaning that there is a loss of confidence from consumers in Japan. 

The price is trading above the short and long-term moving average, strengthening the long signals. The trend lines are getting closer; if these lines cross, we could see the price continue climbing in short to medium term.

The Bollinger bands are very wide, bringing high volatility to the pair in the short to medium term; the bands continue to expand and are moving upwards, suggesting that the uptrend is likely to continue; however, the price is trading very close to the upper band which is usually a strong resistance, but as the bands move upwards, the resistance will move with it. 

The relative strength is currently at 64%, which could limit the current USDJPY rally in the short term as it gets closer to entering an overbought status in the next few trading sessions. If that happens, we could see a temporary sentiment change; however, the retracement will allow the USD to gather more strength to continue climbing.

Our parabolic SAR indicator suggests that the price will continue to move upwards in the short term.

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