USD/JPY bullish momentum builds: Is 160.00 next?
|- USDJPY unlocks 18-month high.
- Breaks the trading range to the upside.
- Technical oscillators point north.
USDJPY surged to an 18-month high, hovering just below the 159.00 level. This sharp depreciation reflects mounting political uncertainty in Japan, fueled by speculation that Prime Minister Sanae Takaichi may dissolve parliament as early as next month to capitalize on her strong public approval and push forward expansionary fiscal measures. The move comes at a critical juncture ahead of today’s US CPI release, adding further intrigue to the currency market.
The upward rally drove the pair to break the short-term sideways channel to the upside, reinforcing the long-term bullish trend, with the next target seen at 160.20. Beyond that, the 38-year high of 161.94, reached in June 2024, could act as a major resistance and potentially pause the upside structure.
Conversely, a drop below the 157.90 support could shift the bias back to neutral, bringing the 20- and 50-day simple moving averages (SMAs) at 156.65 and 155.85 into focus.
Technical indicators confirm the bullish momentum, with the MACD extending gains above its trigger and zero lines, while the stochastic oscillator remains elevated above the 80 level, signaling strong buying pressure.
Overall, USDJPY maintains a robust bullish outlook, supported by political developments in Japan and anticipation of key US inflation data.
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