By Fast Brokers – We got nice movement to the upside from the USD/JPY on Friday after the currency pair got above our 2nd tier downtrend line. However, the bull-run has hit a wall at our 3rd tier downtrend line as investors hesitate below May highs. We’re finally seeing some volatility from the USD/JPY after a dry spell with the currency pair participating in the broad appreciation of the Dollar. The USD/JPY finds itself in an advantageous position in the process. Our 4th and 5th tier downtrend lines are drawing in closer by the day with yearly highs just out of reach. If the USD/JPY can fight through our 4th and 5th tier downtrend lines along with 2009 highs and the critical 100 level, we may witness a near-term explosion to the upside. However, these barriers are certainly worthy foes, and breaking out to the upside will take convincing volume.
Meanwhile, investors should keep an eye on the EUR/USD and GBP/USD since the USD/JPY should continue to exhibit a negative correlation with these currencies for the time being. Currency movements are honed in on the fate of the Dollar, and the appreciation of the greenback over the past few sessions is a result of the realization that the Fed may need to raise rates by year end to defend the currency. While the uptrend is gaining a little momentum, there are some strong medium-term downtrend forces at work.
Fundamentally, we find resistances of 98.66, 99.49, 100.06, 100.74, and 101.55. To the downside, we see supports of 97.98, 97.45, 96.90, 96.33, and 95.82. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 98.63.
Market Commentary provided by Fast Brokers.
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