The USDJPY accelerated in Tuesday morning, as activities gain pace after traders returned from an Easter break.
Fresh strength is exploring levels above 128 mark and trading at the highest in 20 years, with targets at 129.07 (May 2002 high) and 130 (psychological) being in focus.
The dollar remains well supported by policy divergence between the Fed and BOJ and ECB, while rising safe-haven demand on uncertainty over Ukraine crisis adds to greenback’s bullish sentiment.
The pair is on track for the second consecutive monthly rally (March advance was 5.8% and currently is over 5% in April), with signals that gains may extend further, as indicators on larger timeframes are in overbought territory but continuing to head north, keeping so far in play scenario of attacking 130 barrier. Some headwinds could be expected here, but dips in the current situation are likely to be shallow and offer better levels to re-enter strong bullish market.
Rising 10 DMA (125.60) and former top at 125.10 (Mar 28) offer solid supports which should contain extended dips and keep bulls intact.
Res: 128.45; 129.07; 130.00; 130.40.
Sup: 127.96; 127.24; 126.31; 125.96.
