USD/JPY report: Strong support around 111.00, revisit to weekly highs likely

Omkar Godbole FXStreet Contributor

Daily chart

Observations

Long legged Doji signals dip demand
Bulls have been successful in defending 50-DMA despite falling inflation expectations
Strong support around 111.00 levels

Resistance: 111.39 (4-hour 200-MA), 111.79 (weekly high) - 111.80 (100-DMA), 112.13 (May 24 high)

Support: 111.21 (50-DMA), 110.95 (previous day’s low), 110.79 (1-hour 200-MA).

Comment

Recovery in oil prices could lift the long duration treasury yields and strengthen the bid tone around the US dollar. This goes well with the repeated rebound seen from 111.00 levels and the long legged Doji suggesting dip demand.
Thus, spot may revisit the weekly high of 111.79 and may extend gains to 112.13 if the Fed policymakers talk about a rate hike in September/December.
On the downside, only a daily close below 110.74 (200-DMA) would signal bullish invalidation.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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