USD/JPY pulls back after retesting long-term highs
James Chen September 4, 2014 7:54 PM
<p>USD/JPY (daily chart shown below) has tentatively pulled back after approaching a retest of the five-year high of 105.43 that was reached at the very […]</p>
USD/JPY (daily chart shown below) has tentatively pulled back after approaching a retest of the five-year high of 105.43 that was reached at the very beginning of the year. This latest rise to 105.30 on Wednesday has established a full nine-month high for the currency pair.
In doing so, USD/JPY has reached a key upside target and has broken out above a prolonged trading range that has been in place almost since the beginning of the year.
The lower border of this trading range was around the 100.75-101.00 support area, from which the pair began its most recent rise in mid-July. This seven-week advance broke out well above both the 50-day and 200-day moving averages, and has adhered closely to a long-term uptrend support line extending all the way back to the low of September 2012, which was the beginning of the recent bullish trend.
Having just reached up to major resistance around the noted five-year high, USD/JPY is at a critical juncture. Any further upside momentum that pushes the currency pair to new highs after the current consolidation, thereby confirming a continuation of the long-term bullish trend, could soon begin targeting the 108.00 resistance objective to the upside, a key longer-term support/resistance level.
Downside support on any further pullback currently resides around the 103.70-104.00 zone.
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