Richard Perry
Independent Analyst
USD/JPY
The key bull run of the past week has now broken out above resistance at 109.70. The move through resistance, that proved to be a ceiling throughout December, has taken the pair to a new seven month high and once more opens the upside. The key question for traders is whether to chase this breakout. Looking at the RSI suggests caution. Through Q4 2019, time and again the pair looking to be breaking out, only to struggle and subsequently retrace. The RSI is again into the 60/65 area where the breakouts failed throughout Q4 last year. The bulls need to see the RSI closing in the high 60s (or ideally above 70) to really suggest breakout is gathering pace and confirming. The Stochastics are strong but are also back around levels where the breakouts failed. The bulls will be looking to hold a move above the psychological 110.00 with the next key resistance at 110.65. Having broken out above 109.70, a close back below here would now begin to question the breakout. This now becomes a crucial crossroads moment for Dollar/Yen.
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