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Technical analysis of USD/JPY

The USD/JPY has been trading upwards since February when the Bank of Japan expanded its asset purchase program to halt the strengthening trend of its currency, with the pair smashing through the key level at 80.00 to reach the dizzy highs of 83.00 – 84.00. After the Bank of Japan announced on Tuesday 13th that the interest rate shall remain steady at 0.1% and made no reference to further easing steps, the yen gained across the board with the USD/JPY edging lower. Despite the strong uptrend movement, the bears have managed to drag the pair down in the past two sessions. Following the formation of a double top on the hourly chart, there has been an immediate change of the bullish trend with the RSI heading towards the 30 line and the MACD signal line poised to cross the zero line. As the uptrend continues to be in place all eyes will now be on the key support level at 82.17. Whereas in the short term there could be some potential for profit making from short positions, the pair remains in a strong uptrend movement. With the RSI holding firmly above 50 on the daily chart and the US Dollar index resuming its rally above 80.00, long positions with target at 84 are favoured as long as support by 82.17 remains in place. In the alternative scenario, a break below 82 could open the door for the next support level at 80.50.
4 Hour chart

Daily chart

Dafni Serdari
Market Analyst
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