The past month of trading has seen a bullish trend emerge within the USD/JPY and new highs were tested today.
The USD/JPY has found itself engaged within a developing bullish movement which needs attention by speculators if they have not been looking at the Forex pair. Since January the 21st, the USD/JPY has climbed from the 103.280 level to its current values above 105.000. Prices today are challenging mid-term highs within the USD/JPY last traded in November. Resistance levels near the 105.500 juncture should be monitored closely, because if they are proven vulnerable, it may signal another leg higher.
The USD/JPY is a major Forex pair globally because of the amount of trade and financial transactions which underscore its importance. While the USD/JPY has experienced a long-term bearish trend the past month of results serves as a warning to speculators that the USD/JPY has technical but fundamental considerations which must be kept in perspective. Japan is a large exporting nation and it must be remembered that the nation often likes to maintain a weaker Japanese yen in order to facilitate better financial results for its large technology and manufacturing base to generate stronger exports.
The USD/JPY is certainly within the realm of important resistance and speculators who have the courage to step in front of the bullish trend which has been exhibited the past few weeks may suspect that the move higher is about to run out of steam. Using the 105.000 level as an inflection point could prove crucial for traders near term. If the USD/JPY sustains its pace above the 105.000 mark, it may signal that additional gains can be produced higher.
However, if the USD/JPY does fall below the 105.000 level again near term, speculators who have the fortitude to sell into what has been a strong move higher may be proven correct. After experiencing a near one-month bullish trend, the USD/JPY may have the capability to retrace and begin to target support levels below.
Traders can trade the USD/JPY and feel rather comfortable about price fills, but it is still recommended to use limit orders and use leverage carefully. The USD/JPY can move swiftly. If global risk sentiment does start to incrementally improve short term among the major equity indices, there is reason to suspect the USD/JPY could exhibit some downside momentum short term.
USD/JPY Short-Term Outlook:
- Current Resistance: 105.150
- Current Support: 104.900
- High Target: 105.400
- Low Target: 104.550