USD/JPY consolidating above major support
James Chen April 17, 2014 7:33 PM
<p>USD/JPY (daily chart shown below) has consolidated in a trading range above major support that consists of: a bullish trend line extending back to the […]</p>
USD/JPY (daily chart shown below) has consolidated in a trading range above major support that consists of: a bullish trend line extending back to the June 2013 low, the 200-day moving average, and the 101.00 support area.
This strong confluence of support has helped to keep the currency pair afloat and within range of its five-year high of 105.43, which was just established at the very beginning of the year.
Currently, USD/JPY is trading within a tight range between its two major moving averages – the 50-day and 200-day. This continues the general trading range that has been in place since the noted long-term high was hit at the outset of 2014.
Having been entrenched in a tight consolidation near its highs for the past three months, the currency pair has been seeking an opportunity to break to the upside and continue the long-term bullish trend.
An upside push that occurred in late March and early April rose briefly above key 103.75 resistance before quickly failing and falling back to the abovementioned confluence of support.
Major downside support continues to be positioned at the noted uptrend line and 200-day moving average. If the pair is subsequently able to trade and maintain above 103.75, the path could be cleared for a re-test of the 105.00 area.
Any subsequent move above the noted multi-year high of 105.43 would confirm a continuation of the long-standing bullish trend, and could potentially begin to target further upside around the 108.00 resistance level.