USD/JPY: testing the resistance
Last week the USD/JPY pair had a volatile trade, testing the levels above the upper boundary of the long-term triangle. The pair closed the week at 99.15, supported by the NFP-caused euphoria on Friday. However, the bulls were not strong enough to make an impressive break to the upside. Moreover, the pair has formed a weekly “hanging man” candle, pointing to the bearish prospects of the pair. On Monday the pair is trading under a slight pressure, but still holds above 99.00.
For now the upside remains limited by the sell orders clustered in the 99.50/100.00 area (September 20 highs). Rise above 100 would open the way for a further growth. On the downside, the pair remains supported by the 200-day MA (97.75).
Strategists at Bank of America recommend staying “patient” on the pair as long as the pair holds above 98.90 (triangle resistance). In their view, bears will take the pair under control only on a break below 96.60 (October low).
Chart. Daily USD/JPY