USD / JPY Trading Outlook
Profit taking overnight corrected the overbought rally of yesterday but don’t be fooled into thinking this is the end of the trend upwards. No significant support was broken and the outlook from most indicators is still bullish across all timeframes. Support is at 79.84 and a break of this would get the bulls taking long hard looks at their net positions.
USD/JPY since the low of Y76.00 at the beginning of the month, this pair has not looked back. Some might say that the BoJ are intervening and this has caused the push up through the major level at 78.20 and on to highs above Y80.00 which we have seen today. It is very hard for this uptrend to maintain it’s current momentum but when it does slow, the style and shape of the curve will dictate how much profit taking we see.
USD/JPY has been creeping up overnight as risk came off after the EU leaders announcement which weakened the JPY. The pair looks to test the 79.85-88.00 area for a second time this week and if risk returns to the market this barrier may be strong enough to push the pair back down in the short-term. If the price retraces there is a pivot 79.50 with a preference to buy, as long as this holds.
USD/JPY rose to 79.88 a four month high but quickly fell back towards 79.40 as the market did not feel comfortable taking the pair above the physiologically significant figure 80.00. The pair has been in an uptrend through-out February and a break through the 78.30 level on Valentine’s day gave it further momentum up. There is a preference to buy from 79.15 on the pull-back as the pair remains supported by a rising trend line and the initial resistance is 80.00-80.20.
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