Daily Forex Technicals |
Written by FXTimes |
Apr 23 12 12:15 GMT
USD/JPY - Testing if Market is Flat or Bullish
The USD/JPY rallied from 80.27 to 81.76, against the declining channel that started from around the 84.10 area. So far this rally was unable to break through the channel resistance. A break above 81.85/82.00 area would have reflected a channel breakout. Instead the market is respecting the channel resistance and fell back to the 81.00 handle, about 50% retracement of the rally.
Here the market tests whether a bullish market is developing, or if the mode is sideways instead. A bullish market should hold support in the 80.80-81.00 area to start the 4/23 US trading session. Otherwise, the USD/JPY is seen establishing a range between 81.76 and 80.27, with the wind of a downtrend at its back.
A rally above 82.00 will open up the highs near 84.10.
The Bank of Japan interest rate statement is on Thursday and the market is monitoring whether there will be stimulus, or if the bank will fail to mention it. It will be important to observe the reaction after the statement to assess what the USD/JPY is likely to do in the next couple of weeks.
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