USD/JPY continue to fluctuate near monthly R2 at 112.55
Morning outlook - USD/JPY continue to fluctuate near monthly R2 at 112.55
Due to increasing hostile rhetoric between the US and North Korea about mutual destruction, the Yen got another momentum to try to return to the 111.38 level.
But this attempt was neutralized by the 100-hour SMA near 111.72. Because of this support, the buck started restoring its lost positions but once again failed to break above the monthly R2, which is located at the 112.55 level.
In the first half of the day, the pair is likely to fall towards a combination of the above 100-hour SMA and the updated weekly PP at 111.90.
Afterwards, the buck is expected to try to make a rebound and make another attempt to break through that strong resistance level.
But from a general perspective, the rate should enter into a clearly red zone.
Due to increasing hostile rhetoric between the US and North Korea about mutual destruction, the Yen got another momentum to try to return to the 111.38 level.
But this attempt was neutralized by the 100-hour SMA near 111.72. Because of this support, the buck started restoring its lost positions but once again failed to break above the monthly R2, which is located at the 112.55 level.
In the first half of the day, the pair is likely to fall towards a combination of the above 100-hour SMA and the updated weekly PP at 111.90.
Afterwards, the buck is expected to try to make a rebound and make another attempt to break through that strong resistance level.
But from a general perspective, the rate should enter into a clearly red zone.
Comment:
USD/JPY tests 112.55 mark again
One of the ideas expressed yesterday appeared to be true. The currency pair, indeed, formed a minor descending channel and after forming the second reaction low used the 200-hour SMA as a springboard to break through a combined resistance set up by the weekly PP at 111.90 in conjunction with the 55- and 100-hour SMAs.
Despite disappointing Yellen’s speech the rate even managed to test the monthly R2 at 112.55. Basically, today the buck has all means to make the sixth attempt to break to the top. But the fact that the northern side is secured by the upper edge of a long-term dominant pattern plus the above monthly R2, this new attempt is expected to fail again.
One of the ideas expressed yesterday appeared to be true. The currency pair, indeed, formed a minor descending channel and after forming the second reaction low used the 200-hour SMA as a springboard to break through a combined resistance set up by the weekly PP at 111.90 in conjunction with the 55- and 100-hour SMAs.
Despite disappointing Yellen’s speech the rate even managed to test the monthly R2 at 112.55. Basically, today the buck has all means to make the sixth attempt to break to the top. But the fact that the northern side is secured by the upper edge of a long-term dominant pattern plus the above monthly R2, this new attempt is expected to fail again.
An increasing hawkish rhetoric between the United States and North Korea led to appreciation of the Yen by 63 basis points just in three hours. As a result, the pair broke through the 100-hour SMA as well as the weekly PP and ended up near the 200-hour SMA.
Accordingly, today the currency rate might try using this downside momentum to slip to the area between the 111.38 and 111.26 levels. On the other hand, a number of factors indicate on presence of a new junior descending channel. If this assumption is true, then the rate should not fall below the 111.40 mark. In contrast, the buck might use the above 200-hour SMA as a springboard to try to return at least to the weekly PP at 111.90.