The pair USD/JPY falls in a swing session of to below 130.00 after a round of US economic data suggesting the US Federal Reserve (Fed) may start raising rates in sizes of 25 basic points. Consequently, the Japanese yen (JPY) strengthened, sending the USD/JPY pair down 0.24%. At the time of writing, USD/JPY is trading at 129.92.
The USD/JPY pair remains biased to the downside, as the pair has held below the 20-day EMA at 130.60. Friday’s price action remains contained within the bounds of Thursday’s high and low, opening the door for a bullish harami candlestick formation, also known as an inside day in common bar chart lingo. Therefore, USD/JPY could rise before resuming its downtrend.
Therefore, the next resistance for USD/JPY would be 130.00, followed by the confluence of the 20 day EMA and a downtrend line around 130.60, which, once broken, could send USD/JPY higher towards the high of January 24 at 131.11. Breaking above will expose the January 18 high at 131.57.
As an alternative scenario, USD/JPY could fall towards 129.49, January 27 low. Once broken, the next support would be the weekly low of 129.02, followed by the low of 127.21.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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