USD/JPY outlook: bulls extend above psychological 110 barrier on strong risk mode
|USD/JPY
The pair broke above psychological 110 barrier and spiked to new nearly eight-month high at 110.21 on Tuesday, in extension of strong advance in past few sessions.
Rising risk appetite on expectations of US/China phase 1 trade deal boosts dollar, with additional support to greenback seen on rising US CPI (data due later today) which would reduce possibilities of Fed rate cut.
Bullish daily studies add to positive outlook, but bulls may take a breather before resuming as daily stochastic turned sideways in deep overbought territory.
Steep uptrend from 107.65 (8 Jan spike low) suggests that dips would offer better opportunities to re-enter bullish market.
Broken weekly cloud top (109.57) and broken Fibo 61.8% of 112.40/104.44 (109.36) offer solid supports which are expected to hold dips and keep bulls in play for extension towards 110.52 (Fibo 76.4%) and 111.00 (round-figure).
Res: 110.21; 110.52; 110.67; 111.00
Sup: 109.88; 109.70; 109.57; 109.36
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