USD/JPY Forecast April 29, 2013, Technical Analysis

The USD/JPY pair fell during the session on Friday, as you can see on this chart. The fall was significant, and it does appear that the 100 level is going to give us quite a bit of trouble going forward. Looking at this chart, we cannot help but notice that there is the possibility of a double top at this point, and although we believe that this market should continue higher in the long run it appears that we are going to have a real fight on our hands to get above the 100 handle.

Below is, we can see that the 95 level should continue to be supportive, especially considering that at the 96 handle we already have a bit of a double bottom formed. We believe this level should extend all the way down the 95 as it is a large psychologically significant number, which tends to be the case.

The Bank of Japan will certainly work against the value of the yen in the long run, but they have suggested recently that they are perfectly fine with a range between the 95 and the 100 handles. If that’s the case, perhaps the market is simply taking it’s time to break down the resistance at the 100 level. After all, the Bank of Japan won’t be doing anything at this point in time to purposely bring down the value of the yen, and why should they? They’ve already got what they wanted out of the marketplace by simply talking about it.

Going forward, we do believe that the 100 level will get broken eventually, but this is more of a long-term call. We are approaching the summer months, and it is possible that once we have the month of May, the currency markets will slow down much like the stock markets well. If that’s the case, it’s not too hard to imagine a world where we bounced around between 95 and 100 over the course of several months. Nonetheless, we certainly have an upward bias in this pair and certainly would not sell it. Just simply look for pullbacks that show signs of support.


USD/JPY Forecast April 29, 2013, Technical Analysis

Written by FX Empire