FX.co ★ Analysis for USD/JPY, September 27

Analysis for USD/JPY, September 27


As of the results of the last trading weeks, the US dollar won luster with investors, growing across the board. It also exhibited strength against the yen. During the sessions in the period of September 20-24, the USD/JPY pair rose by 0.72% and ended the week with an increase. It is holding near the strong level of 110.75. In previous articles on the dollar/yen pair, I mentioned that this currency pair is sensitive to US macroeconomic statistics, as well as to comments of the Fed and its members. At the last FOMC meeting, Fed Chairman Jerome Powell hinted about the probable tapering of the QE program in November this year. The dollar/yen pair grew markedly amid such news


Analysis for USD/JPY, September 27

On the weekly chart, after falling to 109.00, a strong support level, the pair rebounded. So, it ended the week with confident growth. The bulls were able to push the quote above the red Tenkan line and the blue Kijun line of the Ichimoku indicator, as well as finish the weekly trading above the five previous highs. Thus, the likelihood that the price consolidation has completed and the pair has resumed bullish momentum. However, the current week will show how accurate this assumption is. This pair is well known for false breakouts, as well as escapes from the formed ranges.

Now, to cement the bullish momentum, traders need to push the pair higher and finish the week above another strong level of 111.00. However, this is just one small step. If bulls want to take the upper hand, they should send the pair above the key resistance level of 111.68. Bears are likely to try to return the price below the Tenkan and Kijun lines so that the price will fix below the 109.00 level. If so, the price may decline the orange 144 exponential moving average, namely the level of 108.35. In general, summing up the review of the weekly chart, there are more prospects for further growth. Now let's look at smaller timeframes.


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Analysis for USD/JPY, September 27

As seen, bulls failed to break the resistance level of 110.82 again. In my opinion, it raises alarm bells. The daily chart clearly shows that in August, the pair has already bounced off from this resistance level quite sharply. Yet, following robust three-day growth, the pair went up from the Ichimoku Cloud, thereby confirming the bullish momentum. Technical indicators of both charts give long signals after corrective retracements to 110.40-110.00. However, bears may also take control. If the candlestick reversal patterns appear below the resistance levels of 110.82, 111.00, and 110.68, a signal for opening short positions will form at these charts or smaller time frames.

Good luck!

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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