USDJPY Uptrend Intact as Negative Pullbacks Canceled

USDJPY is showing a bullish tone as it nears the 116.00 handle after the 50- and 100-day simple moving averages (SMA) defused sellers’ attempts to lower the pair. Booming SMAs protect the pair’s broader ascent.

Moreover, the short-term oscillators suggest that the bullish momentum is strengthening. The MACD is holding above its red signal line in the positive section, while the RSI is climbing higher in the bullish zone. Additionally, the rise in the %K stochastic line favors further advances in the pair.

On the upside, the strengthened resistance ceiling of 116.00-116.34 may delay the acceleration of price gains. However, if this barrier fails to contain the mounting upside pressures, the highs of 116.87 and 117.53, identified during the first half of January 2017, could be attacked. Should a deeper upward move occur, the hard barricade 118.17-118.66, shaped from early November through mid-December 2016, which includes a double top formation, could be challenged.

Alternatively, if price action is held back by the 116.00-116.34 hurdle, an initial support band may transpire from 115.00 up to the 50-day SMA at 114.72. In the event that a deeper price pullback occurs, the 100-day SMA at 114.15 could act as another upside defense before the sellers target the lower Bollinger Band at 113.68 and the base at adjacent support of 113.13-113.52. In case the downside forces remain in check, then the critical support boundary 112.00-112.72 might catch traders’ attention.

In summary, the USDJPY is currently maintaining a neutral to bullish tone above the 115.00 hurdle and SMAs. A clean break of the 116.00-116.34 boundary could resuscitate the broader uptrend. That said, a price drop below the 113.13-113.52 support base could raise concerns of a deeper correction taking place in the pair.

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