The USD/JPY continued to trade above the psychological 80 level once again today, despite testing the 79.95 level on the daily chart, before clawing it’s way higher to trade at 80.34 as we move into the evening session, with the markets now waiting for the outcome of the US Presidential election. Despite this pause, the USD/JPY continues to remain bullish on the daily chart, with the green trend dots continuing to climb steadily higher. Our trading indicator is also confirming this positive sentiment for the currency pair, and has remained bright green since mid October following the change in trend dot color as the pair moved out of sideways congestion in the 78.25 area, as the current bullish trend was established. Volumes have remained slightly mixed throughout this period, but in the last few days buying volumes have returned once again on the daily chart and helping to maintain the bullish momentum.
Moving to the three day chart, the picture here is similar. The three day trend remains firmly bullish since the transition from bearish to bullish towards the end of October which has since been confirmed with trading signals on both volume and trend. The key to the short will be a break and hold above the platform of price resistance, now building in the 80.55 region, and if this is cleared, then expect to see the pair continue to move higher, with 81.95 the next target or price resistance ahead. For this to be breached we will need to see sustained and increasing volumes on the daily chart extending the current bullish momentum and giving the Bank of Japan some much needed relief.
By Anna Coulling