USD/JPY Outlook: Bulls regain traction but need close above bull-trendline for positive signal

Slobodan Drvenica Windsor Brokers

USD/JPY

The pair regained traction on Friday and moved higher after holding in red for five consecutive days.
Pullback from double-top at 109.48 was contained by rising daily Kijun-sen and fresh optimism on positive signals from US/China trade talks inflated dollar.
Larger uptrend off 104.44 (26 Aug low) is still in play, despite Thursday's dip and close below the bull-trendline (108.61), but recovery needs return and weekly close above the trendline to generate positive signal.
Next pivotal barriers lay at 108.90/99 (converging 10/200DMA's, on track to create golden-cross) break above which is needed to confirm reversal.
Weak daily momentum requires caution, as repeated close below broken bull-trendline would generate negative signal for extended pullback towards 108.04 (55DMA) and 107.88 (1 Nov trough).
US retail sales (Oct 0.2% f/c vs -0.3% Sep) and industrial production (Oct -0.4% f/c vs -0.4% Sep) are key events today and may provide fresh direction signals.

Res: 108.75; 108.90; 108.99; 109.28
Sup: 108.36; 108.23; 108.04; 107.88

Interested in USD/JPY technicals? Check out the key levels

1. R3 109.42
2. R2 109.14
3. R1 108.79
PP 108.51
1. S1 108.16
2. S2 107.88
3. S3 107.53

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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