USDJPY Technical Analysis: Bulls Break 3yr Downtrend, Limited Resistance Ahead
USDJPY Analysis and Talking Points
- USDJPY Breaks Above 3yr Downtrend
- Limited Resistance Ahead Sets Bulls on a Path Towards 114.
- See our Q3 JPY forecast to learn what will drive the JPY through the quarter.
USDJPY Breaks Major Falling Trendline from 2015
USDJPY saw its 3rd largest one day rise of 2018 yesterday after making a break above key resistance in the form of the falling trendline from 2015. As such, the pair pushed through the psychological 112.00 handle, reaching highs of 112.40. Elsewhere, 14-day momentum remains positive, which in turn signals that the bias is towards the upside for the pair. Additionally, IG’s client positioning shows that given the current sentiment and recent changes to positioning there is a stronger USDJPY bulling trading bias (For more, click here).
Bulls Eye 114 Amid Lack of Key Resistance Ahead
Limited resistance is seen ahead, implies that USDJPY could make a test for 114.00, which coincides with the 23.6% Fibonacci retracement of the 98.97-118.66 rise. A break will likely bring the November 2017 high in focus at 114.70. US CPI will be key on whether the upside in USDJPY is set to last.
RSI indicators, however, are trading in overbought territory, which in turn suggests that USDJPY may stall slightly before pushing for better levels. The previous trendline resistance now flips to support for the pair, while 110.40-50 also offers support.
USDJPY PRICE CHART: Daily Time Frame (August 2017-July 2018)
--- Written by Justin McQueen, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.