Japanese Yen Regains Momentum Against USD, But Range Holds
Japanese Yen Technical Analysis Talking Points:
- USDJPY remains rangebound but has slipped
- The direction of any durable range break could be instructive
- AUD/JPY looks more obviously bullish
That range comes in between the 38.2% and 50% Fibonacci retracements of the March rise (107.69 and 105.35, respectively. It’s been an important source of support for the pair since March 27 and USD/JPY hasn’t traded below it since March 13.
That said the downtrend broken in the last week seems to have re-established itself and that may keep near-term focus on the lower boundary of the range. A break of that on a daily or weekly closing basis might well be bearish for the Dollar and put renewed focus on the March lows below 103.
However Dollar bulls are likely to make a fight of defending the range, hoping that they can break the downtrend once again.
It’s notable though that daily ranges are extremely narrow and that this market looks rather undecided as a result. The fate of this important range looks likely to be an important directional clue for the near-term nevertheless.
Bear in mind too, that the broader downtrend from February 20 remains very much in place and comes in well above the market at 111.15.
The Yen may be looking better bid against the US Dollar but its bulls may be given pause by the more upbeat performance of AUD/JPY.
That cross remains well within its respected uptrend channel, with the pro-cyclical Australian Dollar clearly very much in the ascendant against the anti-risk Yen.
The rise seems to have faltered ahead of a narrow range supplied by the trading levels of February 28-March 6 and that now acts as key near-term resistance. Channel support comes in at 66.43 but that is some way below the market. Closer to hand the 67.76 area may provide a prop, having last stymied Aussie bears on a daily closing basis between April 15 and 22.
Japanese Yen Resources for Traders
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.