USD/JPY confidently moves to north
Morning outlook - USD/JPY confidently moves to north
- In result of the yesterday’s advance, the currency exchange rate managed to cross practically all barriers on its way.
- As a result, the only two obstacles that could prevent the further path to the north, except for the upper trend-line of a former descending channel near 110.42, are the weekly R2 at 110.98 and the monthly R1 at 111.26.
- From this perspective, the Dollar is expected to continue to appreciate against the Yen.
- An aggregate of technical indicators supports this assumption, sending strong buy signals for the upcoming day.
- However, there is also a need to take into account that an average market sentiment remains 58% bearish.
- Moreover, in the middle of the day the above scenario might be altered, depending on the released US PPI data.
In line with expectations, the Dollar continued to advance against the Yen in a junior ascending channel, successfully crossing the upper boundary of a formed dominant formation.
However, an effect from release of data on the US PPI was not as strong, as with other currency pairs. Namely, the pair made two attempts to climb above the 110.68 level but failed.
Due to pressure from the 55-hour SMA, which is moving along the pattern, the pair is likely to make one more attempt to reach the weekly R2 at 110.98.
At the moment, the only factor that could push the pair through this resistance, which is additionally strengthened by the monthly R1 at 111.26, is a release of data on the US CPI and Core Retail Sale. Otherwise, these technical indicators will force the rate to make a rebound.