TECHNICAL ANALYSIS – USDJPY INTRADAY BULLISH AS PRICES CHALLENGE THE CLOUD TOP
TECHNICAL ANALYSIS USDJPY has been edging higher for a second straight day. The pair today hit a weekly high.
Delving into the Ichimoku analysis, the Tenkan-sen line (red) crossed below the Kijun-sen one (blue) in mid-January. This is a short-term negative signal. However, the stochastics which transmit immediate market sentiment are painting a bullish intraday picture as the %K line is at bullish levels at 62, while it has also crossed above the slow %D line. Both these facts indicate positive intraday momentum.
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In its intraday movement, the price has moved above the 50-day moving average (MA) which is currently at 115.10 and is challenging the cloud top at 115.25. The area from the cloud top up to the Kijun-sen line (at around 115.50) is expected to provide some resistance to upside moves. A successful close above this area will bring into view the 117 area, a key area in the past which is likely to act as resistance. If prices cross this as well, the mid-December 10-month high of 118.66 would be subsequently eyed.
On the downside, the area around 114 which is where the Tenkan-sen line is currently situated is likely to act as immediate support to potential downside pressure. Should prices break below it, the late January 7-week low of 112.516 would come into focus as another important support level.
Finally, it is worth mentioning that the pair recorded a bullish (golden) cross at the start of December when the 50-day MA moved below the 200-day one. This is a medium term bullish signal whose strength will be reinforced should prices move comfortably above the 50-day MA.
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