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USDJPY – Above May highs

Market Analysis

USDJPY and AUDJPY, Daily

USDJPY punched above May’s highs and logged a near-four-month high at 114.47, capping a run of fourth consecutive session of gains. A backdrop of rallying stock markets continued to induce yen weakness, with the risk-on vibe continuing to be fed by the combination of Friday’s decent U.S. jobs report coupled with the ECB policymakers cooling of tightening expectations (emphasizing that no policy or guidance change is likely at the upcoming July meeting).

We anticipate the bullish view of USDJPY to continue, with the BoJ seen remaining committed to its dovish policy stance for the foreseeable, which contrasts to the Fed’s tightening path. Hence Long entries have been taken at USDJPY and AUDJPY. Therefore, with the break of the significant 114.00 level and the break of May’s highest high Fractal in USDJPY, an entry was taken at 114.40. Daily Targets have been set at 115.00 and 115.50.

In the Daily Chart, Parabolic SAR and MAC remain positive since early June, while Stochastic and RSI are high looking to have further space until reaching the overbought territory. Support of our entry was set at 113.00

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Elsewhere, AUDJPY has remained on the top, moving above 87.00, but also this week it manages to stay above the significant 200 period EMA in the weekly chart, which is the 86.00 level. Hence today morning after AUDJPY broke the last high fractal in the daily chart, another long entry was taken at 87.13.

In the 4-hour chart and Daily chart, Stochastic lines looking to move upwards, while the signal line has already crossed above the slower MA line. The RSI is at 70 sloping upwards. Hence Daily Targets were set at 87.60 and 87.90.  Support is at 86.00.

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Andria Pichidi

Market Analyst

HotForex

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