Japanese Yen breaks range trade, resumes upside to hit fresh multi-year highs

Chart - Courtesy Trading View

USD/JPY was trading 0.74% higher on the day at 137.04 at around 05:05 GMT.

The pair has ended range trade and has resumed upside to test fresh multi-year highs at 137.27.

Major trend in the pair is bullish. Price action has bounced off 20-DMA support.

Momentum is bullish, Stochs and RSI are biased higher. Price action is above cloud and Chikou span is biased higher.

Stellar US Nonfarm Payrolls (NFP) last Friday provides the Federal Reserve (Fed) leeway to announce more rate hikes.

Data released on Friday showed the US economy added 372k jobs in June, more than forecasts at 268K. The jobless rate remained steady at 3.6%.

Going forward, US inflation will remain a key event this week. The consensus for the US Consumer Price Index (CPI) is higher at 8.7%. While the core CPI is seen lower at 5.7% than the prior print of 6%.

A significant fall in the core CPI will indicate that the price pressures are mostly guided by volatile oil and food prices.

Major Support Levels:

S1: 136.14 (5-DMA)

S2: 135.04 (21-EMA)

Major Resistance Levels:

R1: 137.55 (Upper BB)

R2: 138

Summary: USD/JPY has ended range trade and has likely resumed upside. The pair is poised for upside resumption. Scope for test of 138 levels.