Richard Perry
Independent Analyst
USD/JPY
Since Dollar/Yen broke out above 109.00 on a consistent basis last week, the market has developed more of a consolidation than a decisive pull higher. The market is subsequently still looking to break the shackles for a sustained breakout. We previously discussed the disappointing configuration on momentum indicators which show the RSI still struggling to hold moves above 60 whilst MACD lines are also only rising in tepid fashion. It leaves a sense of caution with the breakout. Having made the breakout above 109.00 we see this to be a signal that the bulls are ready to go, however, they are still reticent. An 11 week uptrend is supportive at 108.30 today but if the 108.65 near term support can hold then the confidence of the bulls will improve. Yesterday’s intraday slip was supported to leave a low at 108.90 and close back above 109.00 for the third straight session. There is still a sense that near term weakness is still being bought into. A close above 109.30 would be a bull signal whilst above 109.50 would release the shackles for the next tests of 109.90 and 110.65. The higher low at 107.85 is now a key support.
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