USD/JPY outlook: Likely to extend sideways mode, awaiting fresh signals from US inflation report
USD/JPY
USDJPY is holding in a sideways mode under new 2023 top for the third consecutive day but remains on track for bullish weekly close.
Today’s short-lived dip was contained by rising 10DMA and left long tail on daily candle, pointing to strong bids and suggesting that larger bulls remain firmly in play.
Overbought conditions on daily chart signal that the action may hold in extended consolidation before bulls tighten grip, for attack at initial target at 148.00, which guards barriers at 148.82 (Nov 2022 high) and 150 (psychological).
Near-term bias is expected to remain with bulls above broken Fibo barrier at 146.10 (76.4% of 151.94/127.22, reinforced by 20DMA).
Although traders remain cautious on persisting threats of intervention, the dollar remains attractive, due to expectations that the Fed will keep high borrowing cost for extended period, as well as persisting gap between US and Japan’s monetary policies.
Res: 147.87; 148.00; 148.82; 150.00.
Sup: 146.68; 146.10; 145.23; 144.44.
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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.
