With the Fed keeping traders guessing, the dollar remains in an upward trend as the potential for monetary tightening stokes demand.
There also is the utter commodity smack down that is flashing signals of globalized deflation. Although, this underlying macro theme has been present for a while now. Gold is undergoing the largest rout is nearly 20 years, and West Texas Intermediate (WTI) crude fell back below $50 per barrel.
The 4H chart for USDJPY shows strong follow through after breaking through a descending (shown by the major descending resistance and descending support).
However, price action is beginning to chop as the pair snags 124 yen per dollar once again. The intraday chart suggests that dollar-yen will likely grind higher through the .
Nevertheless, traders should be weary. The , or trend strength indicator, is showing that the current trend strength is easing a bit. If USDJPY fails to close above 124.14, the pair could retest price support at 123.75; and this would also cause a retest of channel support just slightly lower.
A close above near-term resistance, USDJPY would have upside resistance targets of 124.50 and 124.70. If the pair broke down, ultimately closing below channel support, support will be sought at 123.47 (coincides with the 72 ) and 123.18.
Note: The one thing that can upend the dollar is ongoing softness in U.S. economic data that will derail the presumption of a Fed funds rate hike. The geopolitical and global macro climate will likely make yen attractive longer-term, loosing over 60 percent against the dollar since 2012.
Feel free to follow me @lemieux_26
Original Post: https://teachingcurrencytrading.com/home/in/2015/07/chart-of-the-day-usdjpy-72215/