USD/JPY: Bull pressure to target the 80.60 level
The Japanese yen lost its momentum in the past week with the USD/JPY moving higher above 79.00 on Friday boosted by US economic data that pointed to signs of recovery. The market has recently broken out of consolidation and it appears that it is set on running to the 80.00 area. With currency and bond markets extremely quiet in August, things are expected to heat up this week, as Spain is scheduled to sell government debt on Tuesday, German manufacturing data are coming out on Thursday and Greek and German Prime Ministers meet in Berlin this Friday. At 79.49 at the moment of writing the 80.00 level is seen as a significant resistance barrier. With the MACD signal line set to cross above the zero line and the RSI clearly above the 50.00 level in the past two weeks, the technical setup on the daily chart could be favouring the continuation of the uptrend in the long run. For a decisive bullish sign, a breakout above June’s high at 80.60 level would be necessary and would open the door for more upside movement towards key resistance level at January’s highs above 83.00. In the meantime we could see a pullback to the 78.75 near term support level offering plenty of buying opportunity.
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