- USD/JPY advanced 0.03% at the start of the Asian session after the FOMC Minutes.
- The pair could extend its uptrend once buyers reclaim 135.50.
The USD/JPY moves higher at the close of Wall Street, although it pulled back from the weekly highs reached just above the 50 day EMA, around 135.49, but the FOMC Minutes took the pair down towards 135.00 before the close of the American session . At the time of writing, USD/JPY is trading at 135.06.
US stocks fell on Wednesday, showing risk aversion. The USD weakened but maintained gains against its safe-haven pairs, and according to the dollar index, it posted modest gains of 0.16% at 106.645.
USD/JPY Price Analysis: Technical Outlook
USD/JPY continues to have a bullish bias, despite pulling back from daily highs. The break above the confluence of a downtrend line and the 20-day EMA opened the door for further gains, bolstered by the relative strength index (RSI) just crossing above 50, a bullish sign. A decisive break above the 50 day EMA at 135.38 would open the door for further upside, with the first target being the daily high of 27 Jul at 137.46.
On the shorter time frame, as I wrote in yesterday’s article, “…the major could print a leg lower before resuming the higher time frame’s uptrend towards 135.00 and beyond.” On Wednesday, USD/JPY printed a leg lower towards the 200 hourly EMA just above the Fibonacci 50% retracement around 133.90 and resumed the uptrend. However, it faced a short resistance at 135.49 and consequently fell towards 135.00, ahead of the opening of the Asian session on Thursday.
However, USD/JPY has a neutral-upward bias, and the first resistance will be the 17th August high at 135.49. A break above will expose 136.00, followed by July’s daily high at 136.57.
Technical levels
Source: Fx Street
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