USD/JPY could head north
The rigid barrier
155.00 level represents a major technical and psychological barrier. It acts like a rigid "shell" that the pair has been considering, making it a critical point for growth (breakout) or retreat (rejection).
155.44 the upper level of the Bollinger band, once broken by a daily close, I believe the pair will head north to at 156.78 weekly pivot level, followed by 158.40 level.
The most significant pressure preventing the USD/JPY from breaking this shell isn't just traders; it's the risk of intervention by the Japanese authorities.
Verbal intervention historically causes a sudden and a sharp drop.
Failure to break the shell, the pair will head south to the Bollinger band’s moving average around 153.30 level, a clear break, the next move to follow will be around 151.20 level.
There is a negative divergence between the RSI and the USD/JPY price, as well as the Commodity Channel Index and the USD/JPY price.
As we see, the prices make higher highs, but the RSI and CCI make lower highs, and it is a sign that the uptrend move is getting weaker, and the momentum is fading.
Author
Hany Saleeb
Independent Analyst
Hany Saleeb is a highly experienced Senior Treasurer. With over a decade of experience in treasury, served as Head of Treasury at BM in France and head of research in Sinai Securities.
