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Technical Analysis – USD/JPY approaches 110.00

USD/JPY 10 MAY 2018 | EconAlerts


USD/JPY approaches 110.00 critical level; 200-day SMA acts as a significant obstacle.

USD/JPY has posted a strong bullish run during Wednesday’s trading session and is approaching again the three-month high near the 110.00 psychological level. This region overlaps with the 38.2% Fibonacci retracement level of the down-leg from 118.60 to 104.60. The technical indicators in the short-term seem to be in agreement with the bullish scenario.

From the technical point of view, the price is ready to touch the 200-day simple moving average (SMA) near 110.20, which is acting as strong resistance in the medium-term, in case of a break of 110.00, while it is developing well above the 20- and 40-SMAs in the short-term. The RSI indicator is sloping slightly up in the positive territory, while the stochastic oscillator is moving higher below its overbought region.

If the price successfully surpasses the 38.2% Fibonacci retracement level and the 200-day SMA, this could reinforce the bullish move and drive the pair until the 110.50 resistance level taken from the peak on January 18. A jump above the aforementioned obstacle could push the price further up towards 111.50, which holds near the 50.0% Fibonacci.

Conversely, in case of a bounce off the 110.00 handle, there is a possibility of bearish movement until the next immediate support of 108.65. If the price continues the downward tendency it could open the way towards the 107.80 – 108.20 significant area, which contains the 23.6% Fibonacci.

As a side note, the pair has been consolidating within a downward sloping channel since December 2016 and touched the lower boundary at the end of March, creating a 16-month low of 104.60.

USD/JPY 10 MAY 2018 | EconAlerts

 

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


source: XM

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