USD/JPY Forecast: Outlook constructive, eyes symmetrical triangle resistance

Omkar Godbole FXStreet Contributor

Weekly chart

Observations-

Symmetrical Triangle
Bullish break from falling channel
50-MA bottomed out
Larger falling trend line from Aug 2015 high and Dec 2015 high is still intact

Resistance: 111.71 - 111.84, 112.13 - 112.20, 112.60, 113.60

Support: 111.51-111.48, 111.07, 110.81, 110.61-110.52

Comments

Price action over the last three weeks - Doji followed by bullish outside week candle and a rise to 111.77 this week. This, coupled with a bullish break of the falling channel and the fact that 50-MA has bottomed out signals the spot is likely to extend the gains to 113.60 (symmetrical triangle resistance).

Daily chart

Bullish price-MACD divergence followed by a bullish crossover on the MACD and a break in the RSI above 50.00 signals the bulls remain in control.

However, the 100-DMA of 111.84 is still sloping downwards. A failure to hold above 111.58 (50% Fib R of 114.367-108.802) could yield a pullback to 111.07 (50-DMA), although the bigger picture remains bullish, hence the dips are likely to be met with fresh bids.

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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