- USD/JPY edges higher to hit 2-month high on 114.20 on Fed-BOJ monetary policy divergence.
- Friday’s solid NFP data boosted Dec rate hike bets, and also suggested the Fed would announce that it is prepared to reduce its balance sheet size.
- On the other side, the Bank of Japan on Friday, boosted its bond purchases in order to keep the 10-year yield near zero percent as under its yield curve control policy.
- Yen also dented by lower than expected current account, core machinery orders data released today.
- Technical studies are bullish on daily charts, RSI is biased higher and remains strong at 72 levels.
- However, momentum indicators are at overbought levels, so caution advised.
- Upside has broken consolidation phase after break of Symmetric Triangle pattern, we see scope for test of 61.8% Fib at 114.63.
- The pair finds strong support at 111.78 (100-DMA), and only break below could see reversal of trend.
Support levels - 113.56 (5-DMA), 112.50 (trendline), 112.15 (38.2% Fib retrace of 118.662 to 108.130 fall), 111.78 (100-DMA)
Resistance levels - 114.63 (61.8% Fib), 115, 115.50 (March 10 high)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-consolidates-breakout-above-symmetric-triangle-bias-higher-792050) has hit TP1.
Recommendation: Bias higher, stay long for 114.63. Violation there could see further upside.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest.
