Slobodan Drvenica
Windsor Brokers
USD/JPY
USDJPY dipped early Friday on widely expected BoJ rate hike by 25 basis points, but the weakness was so far short-lived, despite interest rate rising to the highest in 17 years.
Subsequent bounce (approx. 100 pips) suggests that the dollar remains well supported, particularly by wide gap between the monetary policies of Fed and BoJ.
Repeated failure at pivotal Fibo support at 154.97 (38.2% retracement of 148.64/158.87, reinforced by nearby 55DMA and trendline support) where a higher base is forming (still needs confirmation) signals that the pair lacks strength for final break lower.
Near-term action remains within the narrow range for the seventh consecutive day, still looking for direction signal after BoJ’s decision proved to be insufficient to spark stronger move lower.
Formation of bear trap pattern on daily chart adds to initial positive signal which would require more work at the upside to be confirmed (close above rent range top at 156.75 and 20 DMA at 156.94 to verify completion of higher base).
Alternative scenario would see firm break of Fibo support, 55 DMA and trendline support (154.97/50 zone) as strong negative signal, pointing to continuation of pullback from a multi-month peak (157.87).
Technical studies on daily chart remain mixed and lack clearer signal, though overall picture is still firmly bullish, suggesting that limited correction would precede fresh push higher.
Res: 156.46; 156.75; 156.94; 158.08.
Sup: 154.97; 154.76; 154.50; 153.76.
Interested in USD/JPY technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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