After being range-bound for a couple of weeks, USD/JPY has finally broken out of its fences. Currently, the pair is ascending the charts like a new-born caterpillar. Where is it headed now?
During the recent monetary statement, the Federal Open Market Committee (FOMC) kept the interest rates of the United States on hold. Furthermore, the team made a decision against implementing aggressive easing measures.
Instead of adopting measures to solve the economic problems affecting the country, the FOMC decided to continue with its ongoing Operation Twist program. And, recently, there has been no significant economic news from Japan. Therefore, the yen has been trading at the mercy of market sentiment.
Technical analysis on the USD/JPY reveals that it has broken past its descending range pattern. If the pair continues with its bullish run, it might encounter an immediate
resistance at 80.00. On the flipside, if it starts receding, it might encounter an immediate support at 79.00.
The pair is in an uptrend. Thus, medium term traders who were long in the pair should continue holding on to their positions as long as the bullish pressure is still evident. Short term traders would rather wait for all this drama and the earnings season to complete and then have a fresh call on pair.
Financial Market News by pipstoday.com