USD/JPY: Moving averages flat and uncertain – Could it turn into a choppy range play now [Video]
|USD/JPY
There has been a strengthening of the dollar in recent sessions. It is interesting that as risk appetite has fluctuated, there seems to be a move out of the yen (deemed often to be the safest of safe havens) and into the dollar. This has pulled USD/JPY higher in the past couple of sessions to break a corrective move, and the improvement has taken another step forward again today. A third straight positive candle has pulled the market clear above 108.70 resistance which is an important near term move. This shows on the hourly chart as a base pattern (implying c. +160 pips towards 110.30) and with momentum indicators taking on a far more positive configuration, there has certainly been a shift in outlook in the past session or so. Suddenly intraday weakness is being brought into, with mini breakouts becoming supportive. There is a basis of support now 108.20/108.70 and anything around 50/60 on hourly RSI is seen as a buying opportunity. There is a battle ahead though which will define how far this rally can go, and that is an old basis of resistance 109.30/109.70 set to be tested. The 76.4% Fibonacci retracement (of 112.20/101.20) is at 109.60 too. With moving averages flat and uncertain, this could turn into a choppy range play now, lacking trend or conviction. For that reason, we are cautious.
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