USD/JPY – What The Charts Are Saying?
November 4, 2013 3:15 am GMT+0 in Chart Alert
USD/JPY got a medium strength bullish signal by daily Ichimoku cloud when Tenkan line crossed over Kijun line within the cloud. The previous bullish crossover was on October 15th and was a weak signal as the crossover was below the cloud. The price action, that time, had found a strong resistance at the upper edge of the cloud and had taken a sharp dip. Unlike the previous occasion, this time, USD/JPY has broken over the resistance of the cloud and has been sustaining over the cloud for past 2 trading days.
USD/JPY and Ichimoku cloud bullish signal
While we get a positive outlook with the above facts, the price action is against the 200-day EMA resistance. The current 200-day moving average is at 98.82. The pair had failed against the 200-day moving average during the previous attempt to break over it and now it is again struggling against it. However, if we check the two recent lows, the latest drop had failed to retest the low before it and that indicates that the pair has some underlying bullish sentiments.
USD/JPY against 200-day moving average
Resistance of 61.8% retracement level
The above chart indicates how on the previous occasion the pair had failed just below the 61.8% retracement level of the fall from 100.61 to 96.56. The price action has once again broken over the 50% retracement and is sustaining above it.
What to expect?
Further gains are expected towards 99.00. 99.06 resistance is crucial but in case if that fails then the next target should be 99.60/99.65.