Technical analysis of USD/JPY
Tuesday was a day of remarkable gains for the USD/JPY, with the bulls pushing the pair beyond 82.00, as the Fed minutes made no reference to any form of quantitative easing in the near future. With the economic numbers in the US tending higher and the Bank of Japan massively expanding its bond buying program, the Fed looks more likely to raise interest rates before the BoJ, the Yen could continue to weaken over the long term. The technicals are also indicating that the bulls are likely to run the show and push the market further up to fresh 2012 highs beyond 84.00. With the RSI holding above 50 since the beginning of February and the bullish alignment of the 20 EMA over the 50 EMA still in place for over three weeks on the daily chart, there is room for more upside actions. The bias remains bullish on the hourly chart after the market shot up above the 89 SMA and is holding firmly above it, further supported by the crossing of the 20EMA over the 50 EMA. The market is suffering some profit taking in early trading, but as long as resistance by 81.61 remains intact, additional upside beyond 84.00 and into the 85.00-90.00 area could be expected. In the alternative scenario, a downside movement below 81.61 could give the bulls reason for concern and open the door for the 80.00 area.
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