USD/JPY outlook: Near term action looks for direction signals on break of either daily cloud boundary

Slobodan Drvenica Windsor Brokers

USD/JPY

USD/JPY ranges within daily cloud (144.43/145.59) also between daily Tenkan and Kijun-sen lines, with Kijun-sen (145.38) capping the action today.

Near term technical structure is slightly bullishly aligned, with growing positive momentum and repeated close above Tenkan-sen supporting the notion.

On the other hand, overbought stochastic might be limiting factor that partially offsets positive signals.

Sideways near-term mode to be expected as long as price holds within the cloud, as strong downside rejection on Monday and upside rejection today supports scenario.

Firmer direction signals to be expected on clear break of either boundary of daily cloud, with dollar being underpinned by optimism on US China trade talks, though support was so far insufficient for stronger movements.

Markets await release of US inflation data this week, to get more clues about Fed’s action in the near future.

Signals that Bank of Japan will keep its monetary policy unchanged in the meeting next week, could be initial negative signal for yen.

Sustained break below cloud base / daily Tenkan to weaken near term structure and risk test of supports at 143.65/00 and 142.40 on stronger acceleration.

Conversely, firm break of cloud top to generate bullish signal and expose targets at 146.15/38 (Fibo 61.8% of 148.64/142.11 / May 29 spike high).

Res: 145.29; 145.59; 146.15; 146.38.
Sup: 144.33; 143.65; 143.00; 142.40.

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

1. R3 145.99
2. R2 145.47
3. R1 145.01
PP 144.49
1. S1 144.04
2. S2 143.52
3. S3 143.06

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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