Yen returns focus to 110 -111 area


In long term, the pair remains in the upside momentum, based on the momentum indicators’ observation….. The flattened of the 200-DAY  MA, its another sign for the continuation of the consolidation mode.  Resistance is at 110.15-110.00,  which is the confluence of 200-DAY MA, the 1.8% Fibonacci level and the latest 2 high fractals. Only an break of the range 108.50-110.00, should alert in long-term a bullish or bearish future performance. A slip below 108.50, would open the area for a possible retest of the 38.2% Fib. level at 108.00 and the 107.50A flip above the 61.8% Fib. level should see gain up to 2017 levels such as the 111.00-112.00 area. In the 4-hour chart, the Short-term momentum indicators are also pointing to a continuation of the bullish bias. The RSI indicator holds just above the 50 level, Stochastic lines rejected oversold territory and are currently pointing upwards, while the MACD oscillator is neutral.  The pair is at the upper Bollinger Bands pattern, with the crush of PP level and 50-period MA, at 109.35, acting as immediate support level. Resistance is at R1 109.60. 

On the break today of the R1, the next immediate resistances are 109.77 and 109.90. On the flip side, further losses should see a re-challenge of the 109.10 – 109.00, acting as support area. “

The pair broke earlier overnight the 109.60 resistance level and has lifted toward 110.00, returning focus to recent trend highs at 110.01-03. A rebound in the dollar, which has been concomitant with a rebound in U.S. Treasury yields, with the 10-year T-note yield rising back above 3.0%, has driven the move as market participants focus returns back toward favourable yield differentials of the dollar versus the yen. Incoming remarks by Fed members have reaffirmed that the U.S. central bank remains on a course for continued moderate tightening, despite last week’s sub-forecast U.S. CPI data, while a Reuters survey of market economists today found almost half expecting the BoJ to refrain from existing ultra-accommodative monetary policy stimulus until 2020 or later.

Therefore the bullish bias maintains strongly for USDJPY, especially after the last hourly full body  bullish candle, that  reached last weeks peak. The USDJPY as mentioned in my yesterday’s post as well, would need to break and close above recent trend highs, the 61.8% Fibonacci level and the 200-day moving average, situated at 110.10-110.15 presently, to make a convincing affirmation of the bull trend that’s been in evolution since early March. This will lift the pair up to 111.00-112.00 area.

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Andria Pichidi

Market Analyst


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