Technical Analysis of USD/JPY
The dollar made some decent gains against the Japanese Yen after the BoJ added JPY10 trillion to an asset purchase program and set an inflation goal so as to water down demand for the currency and halt its strengthening trend on Tuesday. The USD/JPY broke above the 200-day SMA for the first time in several months and is currently breaking to fresh 2012 highs beyond 78.30. With RSI holding above 70 in the past two sessions and the MACD flipping over zero it looks like the bulls have taken full control of the market. The strength of the greenback against is further supported by the recent rally of the US Dollar index that is currently trading above 79.300. USD/JPY long positions above 78 could target 78.95 and open the door towards October’s high above 79. In the alternative scenario, a downside penetration of 78 could call for 77.75.
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