USD/JPY fails to break above 111.26 two times
Morning outlook - USD/JPY fails to break above 111.26 two times
In line with expectations, until a release of data on the US Retail Sales the currency pair spent in an upward movement. In the process, it made two attempts to break above the monthly R1 at 111.26 but both of them failed.
Due to pressure from the approaching 55- and 100-hour SMAs as well as existence of a recently formed ascending channel, the pair is expected to eventually break through that barrier. An aggregate of technical indicators supports this scenario, sending strong buy signals.
Nevertheless, a possibility of a third rebound and subsequent dissolution of the channel also remains on the table.
In line with expectations, until a release of data on the US Retail Sales the currency pair spent in an upward movement. In the process, it made two attempts to break above the monthly R1 at 111.26 but both of them failed.
Due to pressure from the approaching 55- and 100-hour SMAs as well as existence of a recently formed ascending channel, the pair is expected to eventually break through that barrier. An aggregate of technical indicators supports this scenario, sending strong buy signals.
Nevertheless, a possibility of a third rebound and subsequent dissolution of the channel also remains on the table.
Comment:
Daily perspective (Monthly R2, 200-day SMA and Falling wedge pattern)
Comment:
USD/JPY tries to break below 111.26
Even though in the early Tuesday morning the pair moved quite confidently towards the weekly R1, which is located at the 112.07 level, in second half of the day it made a rebound and did not go above the 111.90 mark anymore.
Surprisingly, but a release of better than expected American housing data did not led to appreciation of the Greenback against the Yen. In contrast, bears successfully dragged it to the bottom and only combination of the 55-hour SMA and the monthly R1 at 111.26 managed to stop the further downfall.
Such outcome suggests considering a possibility of transformation of a dominant ascending channel into a rising wedge. However, even if the new pattern will take the lead this fact should not change the general yesterday’s scenario.
On the other hand, the relevance of this pattern will greatly depend on the Fed’s decision that will be made later this day.
Even though in the early Tuesday morning the pair moved quite confidently towards the weekly R1, which is located at the 112.07 level, in second half of the day it made a rebound and did not go above the 111.90 mark anymore.
Surprisingly, but a release of better than expected American housing data did not led to appreciation of the Greenback against the Yen. In contrast, bears successfully dragged it to the bottom and only combination of the 55-hour SMA and the monthly R1 at 111.26 managed to stop the further downfall.
Such outcome suggests considering a possibility of transformation of a dominant ascending channel into a rising wedge. However, even if the new pattern will take the lead this fact should not change the general yesterday’s scenario.
On the other hand, the relevance of this pattern will greatly depend on the Fed’s decision that will be made later this day.
Comment:
USD/JPY tests upper boundary of long-term pattern
As with other major currencies, the Fed’s decision to reduce the bonds it owns and keep the interest rate unchanged led to sharp appreciation of the Greenback against the Yen.
This surge forced the pair to test a combined resistance level formed by the monthly R2 at 112.54 in conjunction with the upper boundary of a long-term falling wedge. From this perspective, the exchange rate is likely to make a rebound and spend the upcoming month moving in the southern direction.
On the other hand, the pair continues to fluctuate in a junior ascending channel whose relevance is supported by the soaring 55-, 100- and 200-hour SMAs.
As with other major currencies, the Fed’s decision to reduce the bonds it owns and keep the interest rate unchanged led to sharp appreciation of the Greenback against the Yen.
This surge forced the pair to test a combined resistance level formed by the monthly R2 at 112.54 in conjunction with the upper boundary of a long-term falling wedge. From this perspective, the exchange rate is likely to make a rebound and spend the upcoming month moving in the southern direction.
On the other hand, the pair continues to fluctuate in a junior ascending channel whose relevance is supported by the soaring 55-, 100- and 200-hour SMAs.
Comment:
USD/JPY falls amid North Korean statement
In result of combination of technical factors and fundamental events, the currency pair made a turn around a broke though the bottom boundary of a previously dominant ascending channel.
- From technical point of view, the rate encountered a resistance level formed by the monthly R2 at 112.54 and the upper boundary of a long-term falling wedge.
- From fundamental perspective, the new threat from North Korea only accelerated depreciation of the buck.
In the short run the currency rate might try to restore some lost positions, using the 100-hour SMAs or the monthly R1, as a springboard.
But, in general perspective, the pair is expected to enter into a new long bearish phase.
In result of combination of technical factors and fundamental events, the currency pair made a turn around a broke though the bottom boundary of a previously dominant ascending channel.
- From technical point of view, the rate encountered a resistance level formed by the monthly R2 at 112.54 and the upper boundary of a long-term falling wedge.
- From fundamental perspective, the new threat from North Korea only accelerated depreciation of the buck.
In the short run the currency rate might try to restore some lost positions, using the 100-hour SMAs or the monthly R1, as a springboard.
But, in general perspective, the pair is expected to enter into a new long bearish phase.
The pressure from the 20- and 55-hour SMAs as well as formation of a minor ascending triangle expectedly led to further appreciation of the Greenback against the Yen.
At the moment, the pair is confidently approaching to the weekly R1, which is located at the 112.07 level. The fact that the rate experiences pressure from the above moving averages as well as the fact that the rate is fluctuating in an ascending channel point out on the further surge.
However, after crossing this level there is a high chance that the pair will retreat, as an area between the 112.20 and 112.55 levels represents a location of the monthly R2, the 200-day SMA and, most importantly, the upper edge of a long-term falling wedge.
So, from a daily perspective after reaching the 112.55 mark, the Yen is expected to take the lead once again.