USD/JPY Retreats Sharply from Long-Term Highs

<p>USD/JPY (daily chart shown below) has retreated sharply this week after surging to a new 12-year high around 125.85 late last week. That high narrowly […]</p>

USD/JPY (daily chart shown below) has retreated sharply this week after surging to a new 12-year high around 125.85 late last week. That high narrowly missed the currency pair’s upside resistance target of 126.00.

The recent climb up to the noted 12-year high last week began in mid-May when the US dollar experienced a sharp resurgence against other major currencies. That resurgence continued until last week, when the dollar showed tentative signs of peaking and faltering.

While USD/JPY continues to trade within a long-standing bullish trend since 2012, a pullback had been due after such a sharp over-extension to the upside.

2015-06-10-USDJPY daily chart

 

Currently, this pullback has prompted the currency pair to drop down to approach key support around the 122.00 level, which is the previous resistance level marking the last major high in March.

Any sustained breakdown below 122.00 could deal a significant blow to USD/JPY’s recent upside momentum and could push the currency pair back into another prolonged trading range, with the next major support level to the downside around 120.00.

To the upside, with any bounce from the current support levels, the next major target on a further continuation of the entrenched bullish trend remains at the noted 126.00 resistance level.

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