The USD/JPY continues to demonstrate an interesting mid-term bullish trend. Since touching a low water mark of nearly 102.650 in early January of this year, which came within shouting distance of March lows seen in 2020, the USD/JPY has embarked on an incrementally strong traverse upwards. In the meantime, the Nikkei Index and other Japanese indices have also seen a surge of risk appetite escalate as higher values continue to be achieved in the stock markets.
In early trading this morning, the USD/JPY traded above the 106.000 level and this should get the attention of speculators. The USD did gain across the board in Forex yesterday, which may explain some of the strength the USD/JPY produced, but traders need to acknowledge that intriguing resistance levels are now within sight technically for the Japanese yen.
Short-term resistance junctures of 106.080 to 106.180 should be the focus for speculative bulls. However, the mark of 106.270 stands out on long-term charts. If this juncture is penetrated higher, it would mean September values have fallen and may create a suspicion among some technical traders that the longer-term bearish trend of the USD/JPY may be over. Speculators would be wise to watch the Forex pair closely as it traverses its current values and hovers slightly below the 106.000. If the USD/JPY is able to sustain its current values and proves today’s early movement isn’t only impetus via the slightly stronger USD, but part of a weaker JPY ratio too, it could add speculative fuel to the belief that the USD/JPY may continue to exhibit a bullish trend.
Experienced traders know the USD/JPY has a solid track record of producing long-term trends. Speculators may still be suspicious that the incremental bullish climb the Forex pair has produced since early January is a trap and believe the USD/JPY will soon start to engage in bearish activity again. But technical traders may prove wise to ask if now is the time to step in front of the current trend which has emerged and shown it has teeth which may prove dangerous.
Speculators are encouraged to use limit orders to trade the USD/JPY. If the 106.000 level is broken higher it may signal that additional short-term bullish movement may be possible and that resistance levels above are attractive as take-profit targets.
USD/JPY Short-Term Outlook:
Current Resistance: 106.080
Current Support: 105.630
High Target: 106.270
Low Target: 105.300
