USD/JPY Uptrend Nears Key Hurdle at 112.30
Matt Weller, CFA, CMT February 25, 2019 8:20 PM
Two weeks ago, we highlighted 3 reasons USD/JPY was hitting its highest levels of the year, including positive US-China trade talk and a continuation after a big technical breakout. Those two factors remain in force after President Trump delayed the escalation of tariffs on Chinese goods this weekend (see “S&P 500 Probing 4-Month High Above 2800 on US-China Trade Optimism” for more), so it’s not surprising that we’ve seen USD/JPY’s bullish momentum carry over.
Throughout last week, the pair was contained to a tight, low volatility range of about 50 pips, setting the stage for a higher-volatility move this week. Rates have surged by about 50 pips already today, and both the RSI and MACD are in a bullish configuration, suggesting that the path of least resistance remains higher for now.
USD/JPY is now approaching a critical resistance level at 111.40, which served as support back in late October and resistance on Boxing Day. If bulls can overcome that key barrier, a continuation toward the next level of previous-support-turned-resistance at 112.30 could be next.
Source: TradingView, FOREX.com
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