USD/JPY: Higher Resistance Levels Enticing Targets for Bulls

Robert Petrucci

The USD/JPY has come off its recent highs, but it is certainly still within sight of the important 110.000 level, which may prove attractive to bullish speculators.

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The USD/JPY continues to toss and turn near important resistance and, even as it has seen a rather strong reversal lower in the past day, the Forex pair remains within the range of its higher price band. Traders who favor the upward momentum of the USD/JPY have enough technical and behavioral sentiment reasons to continue pursuing the higher trend.

The USD/JPY was testing the 110.000 mark only to fall to the 109.450 vicinity the past day where it continues to languish. Importantly, the Forex pair remains above a critical support juncture which has proven durable the past week. If the current value within the USD/JPY is sustained between the 109.400 to 109.300 levels, it could be a strong indication tthat further buying power is going to develop. A cautious support target appears to be the 109.200 ratio.

After testing highs on the 3rd and 4th of June which touched values in the USD/JPY not seen since early April, the Forex pair has seen some selling. In April, the 109.300 level also proved to be important, and when support eroded, the USD/JPY traded to a low of nearly 107.600 towards the end of April.

However, since the 26th of April, the USD/JPY has incrementally pushed higher. The USD/JPY is one of the biggest Forex pairs globally. Its transaction volumes are enormous and small reversals should always be expected by speculators. However, the Forex pair also has a habit of delivering adequate trends which traders can pursue.

While it may feel rather adventuresome for traders to be buyers of the USD/JPY as it traverses its current price ratio near 109.400, this support area may prove to have rather durable strength as a guardian against lower moves while using stop-loss marks near the 109.300 to 109.200 levels. Technically, it looks as if the USD/JPY has the capability of seeking higher ground and potentially demonstrating that the recent reversal lower was a normal cyclical reaction within the Forex market after touching mid-term highs late last week.

From a risk/reward perspective, there still seems to be more ground that can be attained via buying positions compared to wagers which seek bearish momentum. Traders should be cautious with the USD/JPY and use their risk-taking tactics with appropriate care, but being a buyer within these lower short-term prices being displayed may be worthwhile.

USD/JPY Short-Term Outlook:

Current Resistance: 109.880

Current Support: 103.200

High Target: 110.500

Low Target: 108.840

USD/JPY

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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