USD/JPY: Falling From Predicted Resistance
AvaTrade | Mar 12, 2013 07:37AM ET
The USD/JPY pair engraved another fresh 3-1/2 year low against the dollar on Tuesday. The Japanese yen lost further ground when the Nikkei business reported that Haruhiko Kuroda, who is the BoJ Governor nominee, said that he might unravel the next round of quantitative easing as soon as he steps in next week. The minutes from the BoJ further fuelled this USD/JPY rally, which showed that some members favoured the buying of the longer term maturities of the Japanese government bonds.
On the other hand, the dollar became stronger not only against the Yen, but also against a basket of currencies, as recent economic data released in the U.S is supporting the growth sentiment for the world's biggest economy, and the Dow Jones logged another record close yesterday.
Technical Analysis
The USD/JPY pair is retracing from its resistance level. The RSI did show an early sign of deflection for this retracement, which is now reflected by the price action. However, the bias could still be towards the upside, as we do have a strong longer term trend behind this move. The ascending triangle pattern is also yet to complete fully, which could push the price action towards its major resistance.
Important Zones
Support Zone
94.76-95.00
Resistance Zone
96.30-95.58
96.98-97.17
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by Naeem Aslam
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