USD/JPY surges amid US fundamentals
Morning outlook - USD/JPY surges amid US fundamentals
In line with expectations, the currency rate reached and made a successful rebound from the bottom trend-line of a senior ascending channel. Fortunately for the buck, this technical moment matched with release of information on the US non-manufacturing activity. However, the surge did not last for long, as it was quickly stopped by a combination of the 55- and 100-hour SMAs.
Such outcome suggests that today bears are going to try to restore lost positions and push the pair back to the bottom at least until the 200-hour SMA, which is located near the 112.55 level. The fact that the dominant channel already consists of five confirmation points implies that a breakout is likely to happen in the nearest future. This assumption looks even more probable amid the pair’s failure the surge above the 113.20 level.
In line with expectations, the currency rate reached and made a successful rebound from the bottom trend-line of a senior ascending channel. Fortunately for the buck, this technical moment matched with release of information on the US non-manufacturing activity. However, the surge did not last for long, as it was quickly stopped by a combination of the 55- and 100-hour SMAs.
Such outcome suggests that today bears are going to try to restore lost positions and push the pair back to the bottom at least until the 200-hour SMA, which is located near the 112.55 level. The fact that the dominant channel already consists of five confirmation points implies that a breakout is likely to happen in the nearest future. This assumption looks even more probable amid the pair’s failure the surge above the 113.20 level.
In first half of the day the pair continued to move, as expected. However, a speech delivered by Governor Powell created a favourable impulse for the buck and elevated it against the Yen by 0.36% just in couple of hours.
The fact that the pair did fall below the 112.40 level and made a rebound additionally confirms that it is moving in a medium-term ascending triangle. As the pair faces no barriers on its way, it is likely to surge to the upper resistance line of this pattern, which is located at the 113.21 level.
Although a fourth rebound seems a more plausible scenario, there is a need to take into account an effect from a release of information about the US labour market later this day, which might lead to premature breakout.