USD/JPY: The outlook for the yen has taken a knock [Video]

Richard Perry Independent Analyst

With risk appetite improving early this week, the outlook for the yen has taken a knock. Even against the dollar (which has also been hit amidst improved risk flows), this is driving USD/JPY higher. There is now beginning to build some positive traction on the pair and pressure is building on the old April resistance around 108.00/108.10. This comes as a mini uptrend continues to build over the past two weeks (today at 107.25) and momentum indicators position for breaches of this resistance. The RSI is now edging towards 8 week highs, along with Stochastics moving towards strong positive configuration. A slight pullback into the close last night has been supported today and although another move on 108.00 has initially been rebuffed, the pressure is mounting. A close above 108.10 would confirm a breakout and arguably a small base pattern that would imply a test of the 109.40 April high. The hourly chart shows support forming at higher levels and near term buying into weakness. A breach of 107.20 would change this recovery outlook and neutralise the move once more.

Author

Richard Perry

Independent Analyst

Richard Perry, Independent Market Analyst, has over 20 years of experience working in financial markets in London.

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