USD/JPY: Is the rally off 107.10 more than just another chance to sell? [Video]
|USD/JPY
The dollar looked to build some support yesterday as the corrective momentum of the recent decline just had the pause button pushed. The question is whether the dollar is regaining momentum or whether yesterday’s rally off 107.10 is something more than just another chance to sell. Corrective momentum building on the Stochastics (confirmed sell-signal) suggest that the yen is strengthening now. Given the MACD lines rolling over and RSI back under neutral, if these configurations also continue to develop, then the resistance around 108.25/109.00 looks to be a near term sell-zone. It is interesting to see the market picking up early today, but also that move is just fading coming into the European session, leaving resistance at 108.70. The hourly chart indicators unwinding towards areas where the sellers have previously re-entered the fray. Hourly RSI failing around 60 is especially notable, whilst hourly MACD lines threaten a bear cross around neutral. Volatility is still elevated and this could certainly impact on the timing, but intraday rallies look to be a chance to sell now. Initial support 107.50/107.70 and below 107.10 re-opens the corrective momentum to test 106.50 and then on towards 105.00. Above 109.30 improves the outlook.
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