USD/JPY Forecast: Re-test of Thursday’s high likely
|The Dollar-Yen pair rose to a high of 112.42 on Thursday before the broad based USD selling in the NY session pushed the pair down to 114.48; the lowest level since June 27. The US-Japan 10-year yield remained stagnant at 2.19.
Technicals
Resistance:
- 112.14 (1-hour 100-MA)
- 112.42 (previous day’s high)
- 112.74 (10-DMA) - 112.78 (1-hr 200-MA)
Support:
- 111.82 (4-hour 200-MA + 200-DMA)
- 111.48 (previous day’s low)
- 110.98 (61.8% Fib R of 108.80-114.49)
Daily chart
Observations:
- Spinning bottom at 200-DMA support
- Dips below 200-DMA have been short lived
- The 14-day RSI is bearish below 50.00 levels
1-hour chart
Observations:
- Potential rounding bottom formation
- 50-MA & 100-MA have bottomed out
Comments
- Persistent demand below 200-DMA suggests scope for re-test of the previous day’s high of 112.42. The gains could be extended to 10-DMA level of 112.75, although the rally may not be sustained… given the daily RSI is bearish and the US-Japan 10-yr yield has re-entered falling channel as seen on the chart below.
- Only an end of the day close below 111.78 would signal continuation of the sell-off from the recent high of 114.49 levels.
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