USD/JPY – approaches the Peak of 2015!
- Resistance Zone: 125.30 to 125.60
- Major Pivot Point: 124.00
- Key Support Level: 120.35
- Support Zone: 117.30 to 116.30
- Last Analysis Date: Blue Vertical Line
- 200 Day SMA – Green Line
- 50 Day SMA – Red Line
- CBOE VIX – Volatility Index @ 21.03 +2.46 (+13.25%)
Trade Insights
USD/JPY Pair – shows viable short positions below the Pivot of 124.00 with the target of Key Support level at 120.35. And with further weakness in the US dollar heading downwards to the Support Zone at 117.30 to 116.30 (Tradingview).
Alternatively, Short Positions above the Pivot at 124.00 with the target of Resistance Zone @ 125.30 to 125.60 with further strength pushing towards 126.00, the new peak for the pair since 2015.
Chart Analysis
Directional bias: 2 Week USD/JPY
USD/JPY chart shows that prices are approaching the peak of June 2015 at 125.80. The pair already attempted the test of this Resistance cluster once on 28th March and dropped sharply to touch 121.30 to later retrace back up. It seems there could be a second attempt at advancement through the resistance zone. The parallel ascending channel that started taking shape on the 7th of March 2022 has moved up vertically to bring the prices back up to the 2015 peak. Interestingly the prices dropped sharply from there to touch the 99.10 level by June 2016.
It looks like there could be opportunities for short positions on USD from the current resistance zone of 125.30 to 125.60 on the chart. And the initial fall of the pair could be sharp and quick. The first level of support is at 122.10 and then the Key support level is at 120.35
The Feds are indicating a further hawkish shift in the monetary policy that would mean a rapid shrink of the balance sheet. As a result, the 10-year US Treasury yields are rising. We could experience further highs for the USDJPY pair, perhaps a new high for the past 7 years unfolding in 2022. In the last month, the RSI indicator went on to touch the overbought reading of 87.70. And the prices are appearing to be still in the overbought region.
The weekly technical outlook for USD/JPY is still bullish prices are trading quite above the moving averages. The 50-day SMA red line and the 200-day SMA are still moving upwards as the prices are moving higher and away from the averages.
Fundamental Overview: The 10-year Treasury Yields are rising and marched to their highest level since May 2019 after the Fed Governor indicated higher interest rates coupled with a fast shrink of the balance sheet and stronger actions to drive down inflation.
Click to see Market Insight this week: Market Insight – Bond Yields Rising| Signs Of Recession Risk
