Thu, Mar 30, 2023 @ 02:09 GMT
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USD/JPY: Pullback Found a Footstep Well Above Key Support

The USDJPY is consolidating in early Monday after strong bearish acceleration last Thu/Fri that extended pullback from new 24-year high to two-week low (135.57).

Friday’s close below initial Fibo support at 136.31 (23.6% of 126.36/139.39 upleg) generated negative signal which was boosted by weekly bearish engulfing on the first weekly close in red in 8 weeks.

Pullback found temporary footstep as stochastic on daily chart entered oversold territory, RSI turned north from neutrality 50-territory and momentum moved into sideways mode above the negative zone borderline.

Overall picture remains bullish and sees current pullback preceding fresh push higher and dips are likely to provide better buying opportunities.

Scenario of bounce on pullback’s stall at 135.57 would require initial signal on close above 20DMA (136.82), with extension above 10DMA (137.59) to confirm reversal.

The second scenario includes deeper correction which should find firm ground at 134.40 zone (Fibo 38.2% / June higher base) to keep larger bulls in play.

Traders await Fed’s decision on Wednesday, with widely expected 0.75% rate hike, though 1% raise cannot be completely ruled out, despite sharply falling expectations percentage after initial euphoria seen last week.

US inflation remains high and Fed’s measures are expected to give results in some time that adds to expectations for a hawkish stance of Chief Powell’s outlook for coming months, which would offer fresh support to the US dollar.

Res: 136.81; 137.59; 137.95; 138.87.
Sup: 135.89; 135.57; 134.41; 134.26.

Windsor Brokers Ltd
Windsor Brokers Ltd
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.

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