A USD/JPY Breakout?

USD/JPY appears to have broken out of its recent downtrend on the daily charts.

It has been a very quiet day in Asia as much of the region has shut down or is shutting down for the Lunar New Year. Think Christmas Eve but with monsoons and you will get the picture. On a day of small ranges in the majors, one notable exception is USD/JPY which has risen some 70 tics steadily over the day. There seems to be now one driver of the price action apart from a higher than expected Rinban operation to buy JGB’s in the 5/10 year part of the curve, and a stronger USD generally. I would hazard to say that positioning is a lot more balanced now after the washout to 112.50 in the last couple of weeks.

Technically the move is quite significant. The downtrend line at 114.70 area is also the top of the daily Ichi-moko cloud today. A close above this level is quite bullish from a charting point of view. This now forms intra-day support.

Resistance appears at 115.60, the daily conversion line (in blue) and a previous daily high. After that, the December highs at 118.60 come back into play.

USDJPY Daily

So as we roll into the Lunar new Year in Asia keep a close eye on where USD/JPY closes tonight in New York.

From Singapore, we wish all out readers, “Gōng Xǐ Fā Cái,” Happiness and Prosperity in the Year of the Rooster!

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley