June 5, 2018
The market has started to correct higher, but this so far has been relatively tepid. The near term rebound is likely to find good near term resistance offered by the 111.10 level. Overall USD/JPY pair is moving in an uptrend since 26th March 2018 and making successively higher highs and higher lows. Last week we have seen some profit booking in the pair and it retraced to 108.10 level on the daily chart which was 50% Fibonacci retracement level can be considered as strong support level.
A pair of hammer followed by two bullish marabuzo has confirmed that it is purely an uptrend and there is saying that Trend is your friend, so in an uptrend always buy on dips. The way bulls are dominating the bears it seems like this pair will break the recent swing’s high which is lying on 111.40 level on the daily technical chart. Odds are in favor of bulls and we keep our bias bullish on the pair as long as 108 level remains intact.
. The pair fueled by the upward move in the equities like S&P, DAX, CAC, FTSE all were moving in the north zone. Supporting USD/JPY was the rise in the US 10yr treasury yield from 2.90% to 2.94%, while 2yr yields rose from 2.48% to 2.51%. Fed fund futures yields also rose, predicting a rate hike in June and another by year end.
A bullish crossover on MACD indicator is favoring the bulls and providing trend reversal signal for the time being and RSI is also providing bullish signal from positive territory. The 111.10 level is immediate resistance level followed by 112.50 whereas 108.00 level is strong key support level followed by 107.50 level.
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