The USD/JPY has been testing long-term resistance on a regular basis since late March of this year. As of this writing, the Forex pair is again hovering near crucial higher values. Yesterday’s policy statement from the U.S Federal Reserve certainly helped fuel a spike upwards for the USD/JPY and the Forex pair remains locked within the higher realms of its value range. On the 30st of March, a high which came within sight of the 111.000 juncture was accomplished, which was followed by a low of nearly 107.500 on the 23rd of April.
Since touching this low in April, the USD/JPY has progressively re-established a bullish trend and has tested the 110.000 juncture and above a handful of times. Before yesterday’s policy announcement from the Federal Reserve, the USD/JPY was trading slightly below the 110.00 juncture. However, volatility, as expected, was sparked just before the FOMC Statement from the U.S central bank and the USD/JPY jumped higher. The past twelve hours have seen the USD/JPY traverse above the 110.600 ratio in a capable manner.
Speculators will certainly be looking at March values if they believe bullish momentum will remain intact. The 111.000 resistance level in March proved to be quite strong and the reversal lower was rather demonstrative. The question is if a challenge to resistance will again be established and if this time will produce a different result. Traders need to acknowledge that the USD/JPY has a fairly solid track record when it comes to demonstrating rather prolonged trends.
While some speculators may believe the USD/JPY has gained too much, now may not be the time to step in front of the trend. If the USD/JPY does not produce a volatile reaction lower near term, this may be an indication that the Forex pair has the backbone necessary to continue its bullish momentum higher and test the upper limits of its long-term values. If the USD/JPY begins to trade above the 110.700 juncture in a sustained fashion, traders may want to target higher resistance levels.
Traders should be cautious within the USD/JPY and use their risk-taking tactics wisely. The use of take-profit and stop-loss orders after entering the market should be practiced to avoid the potential of sudden spikes. However, buying the USD/JPY on slight dips lower does look attractive short term and may prove to be a logical wager as the bullish trend continues to exhibit rather strong signals.
USD/JPY Short-Term Outlook:
Current Resistance: 110.750
Current Support: 110.500
High Target: 111.200
Low Target: 110.200
