Previously we’ve mentioned that bulls may need to push above 99.0 for current bearish rut’s pressure to be lifted. Well, they’ve done it. USD/JPY has finally pushed above the 99.0 mark, breaking the 98.25 resistance that has been keeping bulls at bay in the meantime.
Price has been buoyed by Kumo yesterday, which allowed it to break 98.25 briefly before coming back down again. Hindsight is 20/20, but signs were already on the wall that bullish pressure is building up, with each foray above 98.25 this week producing new highs, and today is the day the bulls celebrate after languishing within bears’ shadow for the past 2 weeks.
However, momentum may have issue maintaining current bullish momentum. Stochastic readings have breached into overbought region. Even though readings are still pointing up, it is highly conceivable that we may see a pullback towards 99.0 after price has moved more than 100 pips today.
Daily chart is still bullish. Prices are on track to seek 100.0 and also the 261.8% Fib retracement. Stoch readings have also form an interim trough and there is much more room for readings to go higher compared to the Hourly Chart.
From the fundamentals front, we see Japanese Leading Index reaching a new five year high in February. The final revision by the Japanese Cabinet Office push readings to 97.6. This is the first major improvement that we’ve seen since Shinzo Abe has taken office, and it is a confidence booster that Bold Monetary Policies are working. As long as traders are able to see result from the easing efforts, they’ll continue to lend support to BOJ’s actions which will help USD/JPY to push higher towards 100.0 round number and potentially beyond.
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