The Better NFP Data Was A Catalyst For The USD Rally Including For The USD/JPY Pair

The USD could not reach the support trend line (in blue on the W1 time frame) after all and it rallied sharply with almost 120 pips, reaching the resistance trend line of the downward channel (in red on the D1 time frame) and even broke out below it at 111.048.

Although the pair closed the D1 and the W1 bars below the resistance trend lines, on the smaller time frames and especially on the M15 one can clearly see that the drop at the end of the session was corrective.

The main scenarios for this pair are two:

There could be a return to the red resistance trend line and if the pair remains above it that would be a signal that the trend is reversing into a bullish one with the target to the north being quite high, I think – at 114.00, and after that – at 120.00.

In the alternate scenario there could be a new drop and the pair could reach the support trend line in blue (on the W1) time frame, after which it will rally, I think. We should not forget, however, that on the monthly time frame the pair is at a strong support level.