USD/JPY Forecast: Higher lows have open doors for 110.48

Omkar Godbole FXStreet Contributor

The odds of USD/JPY re-testing Feb. 2 high of 110.48 have increased significantly, according to technical charts.

The pair closed yesterday on a weak note at 109.30, however, dollar's recovery the low of 108.92 left higher low on the chart. Further, the USD bears suffered faced rejection at 109.12 in the Asian session today.

So what we have is a series of higher lows - 108.46 (Jan. 6 low), 108.92 (previous day's low), and 109.12 (Asian session low).

Daily chart

The bullish 5-day MA and 10-day MA crossover (confirmed on Feb. 5) favors an upside move in the pair.

Also, the bearish 50-day MA and 200-day MA crossover (confirmed earlier this month) supports the idea of an upside move. Often referred to as 'death cross', the 50-day MA and 200-day MA crossover usually works as a contrary indicator.

Meanwhile, on the 4-hour chart, the 50-MA and 100-MA have bottomed out. The RSI on the 4-hour chart has turned bullish.

View

The spot is likely to cut through 110.00 levels and test Feb. 2 high of 110.48 in the next 24-36 hours.
A daily close below 109.00 would signal short-term bullish invalidation and open up downside towards 108.28 (Jan. 26 low) and 108.00 (psychological level).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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