The USD/JPY is trading slightly above the 110.000 level as of this writing, and if the higher value is sustained, it could spark speculative wagers.
The 110.000 juncture has seen a sustained amount of trading within the USD/JPY as the currency pair continues to stay within sight of crucial resistance levels. On the 3rd of June, the USD/JPY traded near highs of 110.300, and in late March and early April, the USD/JPY traded between the 110.300 and 110.900 levels for a period of about one week.
Support for the USD/JPY appears to be rather adequate near the 109.800 to 109.600 junctures short term. Intriguingly, the push higher in the Forex pair the past week has occurred as the shadows from the U.S Federal Reserve comes into focus and financial houses position themselves ahead of the interest rate pronouncement which will come late tomorrow.
The USD/JPY has been trading within the higher sphere of its price range since early March and has not shown much technical pressure to challenge support in an escalating manner. In fact, since the early part of May, the USD/JPY has incrementally seen support levels rise. Technical traders who look at long-term charts will clearly see that the 110.250 juncture looks very important short term. If this ratio is broken higher and value is maintained, traders may begin to believe that late March and early April highs are a legitimate target.
In February and March of 2020, the USD/JPY did trade near values slightly above 111.00. Short-term traders need to be careful with the current price levels of the USD/JPY as they challenge long-term resistance. The trend from the Forex pair has been bullish since the last week in May. However, resistance levels above could prove dangerous and reversals could be sparked abruptly.
The next day-and-a-half of trading within the USD/JPY is certain to be challenging and speculators should expect volatility as financial houses react to technical and behavioral sentiment indicators. Traders who are conservative may consider waiting for the U.S Federal Reserve’s FOMC Policy Statement on Wednesday before they take positions.
Aggressive speculators should use stop-loss and take-profit orders effectively. Buying the USD/JPY in the short term on slight pullbacks and looking for upside momentum to challenge short-term resistance levels could prove a logical wager, but traders need to make sure they are ready for fast conditions.
USD/JPY Short-Term Outlook:
Current Resistance: 110.250
Current Support: 109.670
High Target: 110.750
Low Target: 109.300