USDJPY Bounces From Support, Further Gains Possible
USDJPY price, charts and analysis:
- USDJPY has bounced again from support at a rising trendline and the 50-day moving average.
- That suggests it could now rally back to its recent highs.
- The pair’s technical strength has fundamental backing too, with the Bank of Japan clearly in no rush to tighten monetary policy.
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USDJPY gained ground Tuesday after the Bank of Japan pledged to keep interest rates “very low” and also took measures to make its huge monetary stimulus program more flexible.
Technically, the advance again took prices away from a rising support line connecting recent higher lows that has guarded the downside since late May. That sits currently at 111.00, just above the 50-day moving average, now at 110.82, suggesting there is strong support between those two levels.
USDJPY Price Chart, Daily Timeframe (March 21 – July 31, 2018)
The latest rally has taken USDJPY up to 111.87 at the time of writing and the pair is now well placed to challenge the highs at 113.14 and 113.18 reached on July 18 and July 19. Moreover, if those levels can be breached, there is potential for a climb further towards trendline resistance currently close to 114.00.
If this proves wrong, there is further support at the lows of 110.66 and 110.59 touched on July 25 and July 26.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.