USD/JPY: it’s time to reload
By Elizaveta Belugina
USD/JPY is persistently pushing higher and higher with no evident pauses. USD reached levels above 115 yen, the maximal level since Nov. 2007. The pair has once again jumped up as the Bank of Japan’s Governor Kuroda said that the central bank will maintain massive monetary stimulus as long as needed.
Next week will be less intense in terms of the economic news. As a result, there will be less fuel for USD rally. Japan will release data of the medium importance like the current account balance on Monday, tertiary industry activity on Tuesday and core machinery orders on Wednesday. Note that on Tuesday US markets will be closed due to the holiday, so trading will take place in the environment of low liquidity.
Technical picture: At the beginning of the week the pair formed a bullish gap in the area of 112.30/66. This gap still hasn’t been closed. Indicators show that the pair is overbought. The consensus is that USD/JPY will keep rising – most name 120 yen as a target. At the same, it’s obvious that USD needs to take a breath before resuming growth. We’ll consider a decline to least to 113 and 111.60 a healthy correction. The next support is located at 110 yen. The bulls will dominate the market until the pair stays above this mark. On the upside the next targets are at 116 and 117.90 yen.