Morning Market Update – USD/JPY

Intraday bias in USD/JPY remains mildly on the upside for the moment. As noted before, the fall from 110.66 could have completed at 108.817. Further rise would be seen coming back at 109.884 resistance first. A break there will target 108.817 key near term resistance again. On the downside, a break of 108.81 minor support will turn the focus back to 108.602 instead.

In the bigger picture, the corrective structure of the fall on the pair has completed and it suggests that a rise can be seen further. A break of 108.602 will target a test on 109.884 high. At this point, it’s uncertain whether the rise from current levels is resuming the long term up trend, or it’s a leg in the consolidation from 108.817. Hence, we’ll be cautious on topping as the price approaches 109.884. If the rise from these levels extends higher, the upside should be contained by first of 109.884 and bring rebound.

We had a quiet start to the day which is slowly rising from the support area with a very tight consolidation candle. An uptick candle reflects certainty now that the pair may be in for some correction. However, the bulls will point to the consolidation above the previous high at 109.439 which suggests that they are confirming the breakout. Momentum on the daily chart remains strong with the pair crossing back higher and the rising can be seen on the four hour chart.

With the support of low at 108.817, there is a band of support which the bulls will look to use as a buy zone in order to maintain the recent momentum of the breakout. Ultimately though, corrections still remain a chance to buy for further gains.

The USD/JPY pair rallied upwards strongly by today’s opening to breach the bearish minor resistance and started bullish correction from the decline measured at 108.817. The price achieved initial breach to make the price action bullish and closed the last four hours’ candlestick above it, which paves the way for the price to head towards the next correctional level at 109.875.

Therefore, the bullish trend will remain suggested in the upcoming sessions, and breaching the targeted level will push the price towards 109.875 as a next main station, while the bullish trend will remain valid and active unless breaking 108.817 level and holding below it.

Expected trading range for today is between 108.817 support and 109.875 resistance.

Expected trend for today: Bullish
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