Usdjpy Rises Above Resistance

last updated on

Usdjpy Rises Above Resistance

Usd/Jpy Rises Above 156.50 After Possible Intervention

The USD/JPY has once again cleared the 156.50 resistance after going through a sharp decline during the time of thin liquidity on Thursday. According to many, the decline seen in the USD/JPY was due to the intervention of the Bank of Japan, which took advantage of the thin market liquidity.

However, an uptick in the US bond yields and the US Dollar has mostly reversed the suspected BoJ's actions which led to the sell-off.

Usd/Jpy Trades Near 158.40, Eyes Next Resistance At 160.00

For now, the USD/JPY is seen trading near 158.40 on Wednesday, and the D1 chart shows that price action is developing below the 9 EMA. This is a sign that despite the recent pullback, even the short-term momentum favors the Japanese Yen.

That's why the safest play here is to wait until the USD/JPY develops above its 9, 10, and 20 EMA lines. This will signal that the short-term trend has reversed in favor of the bulls.

Meanwhile, the famous momentum indicator 'RSI (14)' is also printed under the 50 level. This is a sign that the momentum is also controlled by the US Dollar sellers.

On the D1 chart of USD/JPY, the first resistance is around 159.20, where the 9 EMA is located. After that, the next hurdle is 160.60, the lowest range of the trading channel.

If we look at key resistance levels, the first one is at 158.00, and the next one is around 157.00. A break of these two levels will expose the next daily resistance at 154.55.

Overall, a sharp decline was seen in the USD/JPY pair, but that has since been reversed by market forces. This is partially due to the improved yields and a modest demand for the US Dollar. There's no official confirmation, but many suspect that it was the work of the Bank of Japan.

Data from Tuesday has already shown that BoJ entered the FX market on both Thursday and Friday to help support the JPY against the USD.

Trending Stories