USD/JPY Forecast: Bulls eye 113.19

Omkar Godbole FXStreet Contributor

The Dollar-Yen pair clocked a low of 111.99 yesterday on modest risk aversion, but ended the day at 112.31, tracking the recovery in the US 10-year treasury yield from 2.31 percent from 2.34 percent. As of now, the spot is trading at 112.64; up 0.35 percent on the day.

The technical charts indicate the spot is caught up in a bull-bear tug of war.

Daily chart

The above chart shows-

Potential head and shoulders pattern -It is a bearish reversal pattern, but works best at the top of the bull run. As of now, the pair is trading well below the Dec. 2016 high of 118.66. Hence, the pattern is not valid.
Also, the 5-day MA and 10-day MA are sloping upwards in favor of the bulls. The RSI has just moved above 50.00 (into bullish territory).

4-hour chart

On the above chart-

It appears the pair is eyeing completion of the inverse head and shoulders pattern with neckline hurdle at 113.19.
Bull flag breakout - it is a continuation pattern, i.e. it signals the rally from the low of 111.00 has resumed.
A bullish 50-MA and 100-MA crossover is almost confirmed.
The RSI favors the bulls.

View

Clearly, the odds are high that bulls would come out victorious. The spot looks more likely to test 113.19 today. A 4-hour close above 113.19 would open up upside towards 115.38 (inverse head and shoulders target breakout target as per the measured height method).

Also, a bull flag breakout has also opened doors for 114.18 (again, target as per the measured height method).

On the downside, only a 4-hour close below 112.00 would abort the bullish view.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.