The USDJPY eases from new nine-week high on Monday, as bulls faced strong headwinds at 136.44 (Fibo 38.2% retracement of 151.94/127.22) and ahead of converged 100/200DMA’s which are forming a bear-cross, prompting traders to collect some profits after last Friday’s 1.3% advance (the biggest daily gains since Feb 3).
Larger bulls started to lose traction, though dips are likely to be shallow as 14-period momentum on daily chart is rising while RSI turned south after touching the border of overbought zone.
Dollar keeps firm bullish stance on fresh hawkish rhetoric from Fed and higher than expected US inflation and consumer spending data, which contribute to scenario of extended policy tightening cycle and possible renewed increase of pace of rate hikes, in Fed’s key task – bringing high inflation under control.
Adding to bullish scenario is formation of reversal pattern on monthly chart, as well as bear-trap under psychological 130.00 support.
Rising 10DMA (134.66) and Friday’s low (134.05) offer initial supports ahead of 133.00 zone (Fibo 38.2% of 127.22/136.55, reinforced by rising 20DMA), which should contain deeper pullback to keep bulls intact.
Res: 134.66; 137.12; 138.17; 138.58.
Sup: 135.41; 134.66; 133.50; 132.80.