USD/JPY begins 2015 in rebound and recovery mode
James Chen January 5, 2015 8:01 PM
<p>USD/JPY (daily chart shown below) began 2015 in the midst of a strong rebound and partial recovery after a major pullback that prompted the currency […]</p>
USD/JPY (daily chart shown below) began 2015 in the midst of a strong rebound and partial recovery after a major pullback that prompted the currency pair to tumble from its new seven-year high in early December.
The pullback brought USD/JPY down from the multi-year high of 121.83, just short of its 122.00 target, to a low of 115.55 within the first half of December. This represented a drop of more than 5% in little more than a week.
The drop spiked down to touch the key 50-day moving average before rebounding sharply and proceeding to recover much of the ground lost during the pullback.
USD/JPY continues to trade within a long-term bullish trend that extends back for at least the past two years. This trend began to accelerate dramatically within the past five months, since August, when the recent and ongoing US dollar rally was in full swing.
Having staged a tentative rebound towards the end of 2014 after the 5% pullback, USD/JPY has provided an indication of its resilience and that its recent bullish run may not be over yet.
With short-term downside support now set around the 115.50 level, the major upside target continues to reside around the noted 122.00 level. With any further upside trend momentum above 122.00, which would confirm a continuation of the entrenched uptrend, the next further target into 2015 resides around the 124.00 level.