Another day of rest and relaxation for the Bank of Japan, as the USD/JPY pair pick up speed once again, and move inexorably towards three figures and beyond, at which point the bank will no doubt breathe a unified sigh of relief. From a technical perspective, February was a worrying time, with the pair trading in a congested area, testing the 91.00 area to the down side and the 94 price region to the upside, as shown with the yellow dotted lines on the daily chart. This region was also defined by the pivots throughout February.
However, last week ended with a positive tone, and a wide spread up candle which finally breached this region, and with a solid platform of support now in place below, we can expect to see further bullish momentum in the short to medium term. Indeed the break higher on Friday was accompanied by strong and rising volume, a positive signal for bullish trader, and indeed throughout the week volumes had been rising consistently on both the daily and three day charts.
This bullish tone is further confirmed by the trends in both time frames which remain firmly bullish, and with the heatmap also returning to reflect positive sentiment, the next stopping point for the pair is the psychological 100 level. In today’s forex trading session, the pair have paused once again, but are now preparing to test the 97.98 high of 2009, and any move beyond this level will then lay the foundations for an attack on the 100.00 level and beyond.
By Anna Coulling
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