XM Group | Jan 17, 2024 04:14AM ET
The Average Directional Movement Index (ADX) is edging higher, above its 25-threshold and signaling the presence of a modest bullish trend in the market. Similarly, the RSI has jumped above its 50-midpoint and is now hovering around a new 3-month high. More importantly, the stochastic oscillator has entered its overbought territory, a tad above its moving average. It can stay there for a while before signaling the end of the current bullish move.
Should the bulls remain hungry, they could try to decisively overcome the busy 146.22-147.71 range, which is populated by the 78.6% Fibonacci retracement of the October 21, 2022 - January 16, 2023 downtrend, the August 11, 1998 high and the 50- and 100-day simple moving averages (SMAs). Higher, the bulls could stage a move towards the October 3, 2023 high at 150.15 with the ultimate target possibly being the 151.94 level.
On the flip side, the bears could try to defend the 146.22-147.71 area and then gradually push USDJPY towards the September 7, 2022 high of 144.99. Even lower, the support set by the 200-day SMA at 143.80 could prove stronger than currently anticipated, but if successfully broken, the bears could then have a go at 61.8% Fibonacci retracement level at 142.49.
To sum up, the upward move in USDJPY continues, gaining the support of most momentum indicators but the bears are hoping that the busy 146.22-147.71 range could put a temporary stop on the current rally.
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