USDJPY To Hold Its Bullish Tone

USDJPY settled at a solid base around the former support area of 109.05 last week, drifting northwards to claim the previous resistance area of 109.54 and peak at a one-month high of 110.73 on Wednesday. Although the neutral trajectory is still intact in the short-term picture, the momentum indicators set up the potential for another bullish swing to take place in the coming sessions, but with some caution.


Specifically, the RSI is rising with a strong positive momentum above its 50 neutral levels, marking new highs within the bullish area, while the MACD is looking to strengthen in the positive zone. The Stochastics though is fluctuating within overbought waters, suggesting the upside move could soon lose steam, while the red Tenkan-Sen and blue Kijun-sen lines have yet to complete a bullish cross.


The surface of the Ichimoku cloud is currently keeping the bulls under control at around 110.74. Should it give way, with the price breaching the 111.00 number too, the way would clear towards July’s peak of 111.65 and the broken ascending trendline. The 112.21 barriers from February 2020 could next come on the radar, while higher, the pair may attempt to touch the 113.00 psychological level for the first time since the end of 2018.


If selling pressures return, the pair may initially seek support somewhere between its 50- and 20-day simple moving averages (SMAs) currently at 110.17 and 109.90 respectively. A break lower could see some consolidation around 109.45 before the door opens again for the key 109.00 handles and the two-month low of 108.71. All in all, USDJPY is expected to trade bullish in the short term, where any break above 111.00 could push for an outlook upgrade above 111.65.



0 views0 comments

Recent Posts

See All