Hello traders! Today I’ve already shared analysis on the USD/CAD and here will be sharing analysis on the USD/JPY currency pair. Obviously both of these pairs have one thing in common, and this is presence of the USD. It certainly looks like USD is starting to gain some traction across the board but this could either be a long term uptrend or just one impulsive move to the upside.
If we look at the hourly chart, USD/JPY started to produce higher highs and higher lows. The most recent correction has resulted in the break below the uptrend trendline although the 200 Exponential Moving Average was rejected for the second time. Buyers are clearly defending 107.30 area and as long as price remains above, the wave to the upside can be expected.
There is a very strong resistance which is located at 108.40 and confirmed by two Fibonacci retracement levels. The 61.8% Fibs of the overall downtrend and 427.2% Fibs applied to the corrective move down when the EMA was rejected for the first time. If the price will move up as expected, it will be a 100 pip gain for the USD/JPY which can be reached relatively fast.
Bias: Bullish while above 107.33
Potential Support Zone: 107.30 – 107.50
Potential Targets: 108.40
Have a profitable trading!