- The bias remains bullish despite the last sell-off.
- Taking out the upper median line (uml) validates further growth.
- False breakouts may announce a new leg down.
The USD/JPY price has recently embarked on a formidable upward trajectory, now resting at the significant level of 150.70. This bullish inclination persists despite minor fluctuations in the short term. However, it is imperative to exercise prudence and await confirmation, as the US dollar may only be experiencing a corrective upside move.
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Fundamentally, the currency pair has displayed a notable gain, even in the face of better-than-expected results from Japanese Average Cash Earnings and Household Spending, juxtaposed with disappointing figures from the US Trade Balance in the previous trading session.
Today’s data reveals that Japanese Leading Indicators have come in at 108.7%, slightly below the anticipated 108.8%. Additionally, the financial world is keenly watching as Federal Reserve Chair Powell is scheduled to address the public—a high-impact event that could send ripples through the markets. Moreover, the Final Wholesale Inventories report and speeches from Federal Open Market Committee (FOMC) members hold the potential to inject further dynamism into the trading landscape.
Looking ahead, Japan is set to release several key economic indicators tomorrow, including Economy Watchers Sentiment, Current Account data, the Bank of Japan’s Summary of Opinions, and Bank Lending statistics. Concurrently, the United States will be closely monitoring developments, as US Unemployment Claims data and another address by Federal Reserve Chair Powell are expected to wield substantial influence on market dynamics.
USD/JPY Price Technical Analysis: Leg Higher
From a technical standpoint, the USD/JPY pair has encountered robust support just below the median line (ml), prompting a notable upward surge in its trajectory. It currently finds itself in a position to challenge the upper median line (uml) of the descending pitchfork, which serves as a dynamic resistance level. A decisive breakout from this resistance is poised to set the stage for further upward momentum, while any false breakouts may signify a potential reversal and subsequent decline.
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It’s worth noting that the weekly R1 at 151.10 looms as a significant barrier to upward movement should the exchange rate continue its rise. However, given the remarkable surge observed thus far, it remains prudent to acknowledge the probability of a temporary retracement. This would allow the price to gather additional bullish momentum before embarking on its next leg higher.
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Source: https://www.forexcrunch.com/usd-jpy-price-challenges-dynamic-resistance-eying-fomc/
