USD/JPY outook: Larger bulls gain traction after limited pullback

Slobodan Drvenica Windsor Brokers

USD/JPY

USDJPY strengthened on Thursday after a pullback from new multi-week high (157.96, hit on Mar 3) was contained by rising 10DMA (156.34).

Thursday’s action has so far been shaped in a Hammer candle that signals potential end of a shallow correction (157.96/156.44).

Overall structure remains firmly bullish on daily chart, supported by strong positive momentum and multiple bull-crosses of daily MA’s (in bullish configuration), contributing to signals of bullish continuation of the upleg from 152.26 (Feb 12 low) following violation of key barrier at 157.65 (former top of Feb 9).

The notion is supported by strengthening dollar on increased safe-haven demand and fading expectations for Fed rate cuts, as deepening geopolitical crisis threatens of boosting inflation.

Bulls look for retest and clear break of Tuesday’s peak at 157.96 that would confirm fresh bullish signal and a double bottom at 152.11/26) and expose targets at 159.22/45 (tops of Jan 23/14).

Initial supports lay at 156.62/34 (Fibo 23.6% of 152.26/157.96 / 10DMA), followed by 155.98 (daily Tenkan-sen) and more significant 155.79 (Fibo 38.2%/top of thin daily cloud) which should contain potential dips and keep larger bulls in play.

Res: 157.65; 157.89; 158. 90; 159.22.
Sup: 156.62; 156.34; 155.98; 155.79.

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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