USD/JPY outlook: Recovery attacks key barriers, bear-trap underpins the action

Slobodan Drvenica Windsor Brokers

USD/JPY

USDJPY regained traction on Wednesday, after spiking to the lowest in nearly one month on Tuesday.

Strong downside rejection formed a bear trap pattern (under daily cloud base), as well as Hammer candle (Tuesday), adding to developing positive signals.

Strong resistances at 147.60 zone (daily cloud top / converged 10/20 DMA’s) are under pressure, with sustained break here to strengthen near-term structure for fresh recovery towards targets at 148.05/46 (Fibo) and key barrier at 148.70 (200DMA).

Bullish near-term bias expected while the price holds above 55DMA (147.18), but caution is required as daily studies are bearishly aligned (daily RSI below 50 / 14-d momentum in negative territory).

Thursday’s release of US August inflation report will be in focus for the final signals ahead of FOMC policy meeting next week.

Res: 147.72; 148.05 148.46; 148.70.
Sup: 147.39; 147.18;146.70; 146.30.

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

1. R3 149.11
2. R2 148.33
3. R1 147.87
PP 147.09
1. S1 146.63
2. S2 145.85
3. S3 145.38

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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