USD/JPY Forecast: Seeks Acceptance above 107.78

Rising Treasury yields lift USD/JPY.
Bulls need a close above 107.78.

Omkar Godbole FXStreet Contributor

The USD/JPY is solidly bid as I write, courtesy of the uptick in Treasury yields. However, only a close above 107.78 would signal a continuation of the rally from the March 26 low of 104.63.

That said, the technical studies do suggest a potential for a convincing break above 107.78.

Daily chart

The spot found acceptance above 107.02 (23.6% Fib R of Nov high - Mar low) earlier this week and closed yesterday above 107.32 (September low), adding credence to the ascending (bullish biased) 5-day moving average (MA) and the 10-day MA.

The relative strength index (RSI) is trending north in favor of the bulls, having formed a base above 50.00 in the last two weeks.

The Bollinger bands (+2, -2 standard deviation from the 20-day moving average) has adopted a bullish bias.

Further, the weekly chart shows a bullish 5MA and 10MA crossover.

View

The pair looks set to close above 107.78 and extend gains to 108.50 (38.2% Fib R of Nov high - Mar low).
The base seems to have shifted higher to 106.50.
A close below 106.50 would signal a short-term bullish-to-bearish trend change.

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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