USD/JPY Working on a No-hitter
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- USD/JPY on 8-day winning streak
- Internal trendline resistance caps, but seasonal tendencies still positive through Japanese fiscal year end
USD/JPY is working on an 8-day winning streak. According to the FT, the longest streak in the free float era (not counting days when the pair finished unchanged) is 11 back in 2001. As impressive as the run over the past week has been, little technical damage has been inflicted on the broader downtrend – at least yet.
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While yesterday the exchange rate did manage to get convincingly above the median line of an Andrews’ pitchfork structure drawn from last year’s highs it is clearly having difficulty with the internal trendline that connects the February and early March lows around 113.75. Let’s see if the rate can get above there. Even if it can, it is important to remember that the rate is still within the confines of a pretty clear range between 115.00 and 111.00. The top end of the range roughly coincides with the 38% retracement of the 2016 range and I would probably need to see that convincingly breached to signal that a reliable base is actually in place. Seasonal tendencies seem to support a push past the end of Japanese fiscal year end, but the burden of proof looks be on the bulls and whether they can get through levels of any meaning.
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--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.