- The bullish breakout remains elusive.
- Could test the descending 50-day moving average (MA) lined up at 106.77.
The USD/JPY continues to have a tough time holding on to gains above the key resistance of 107.49 (April 5 high).
The pair picked up a bid on Friday and jumped to 107.78 - the highest level since Feb. 22, however, by the day's end the pair had fallen back to 107.34. The resulting candle with a long upper shadow indicates bullish exhaustion.
The story in Asian session is not different. Russia condemned the US-led missile strikes in Syria, but the much-feared retaliation did not come through. Consequently, the risk assets found bids in Asia and Japanese Yen suffered losses in the early Asian session, pushing the USD/JPY higher to 107.61. But, once again a break above 107.49 was short-lived, possibly due to losses in the Chinese stocks and the pullback in the S&P 50 futures.
Daily chart
-636594532959550065.png)
The repeated failure to hold above 107.49 despite the bull flag breakout indicates the rally from the low of 104.63 has run out of steam and could yield a sell-off to 106.76 (50-day moving average).
The 5-day moving average (MA) and the 10-day MA is biased bullish, so the drop to 106.76 could be short-lived.
That said, a daily close below 107.45 would signal rising wedge reversal (bearish revival). Also, a close below 107.20 would confirm a bearish doji reversal (bearish revival). In both cases, the USD/JPY risks revisiting 105.20s.
A weaker-than-expected US retail sales, coupled with risk-off in stocks could easily push the spot below 105.20s.
On the higher side, only a daily close above 10749 would signal bull breakout and open doors for a sustained rally to 108.28 (Feb. 21 high) and 109.00.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.