USD/JPY has been impulsively bullish recently after breaking above the resistance of 108.50. The price has been very impulsive and non-volatile with the bullish move, which has engulfed weeks of bearish price action providing a clue of further bullish pressure in the market. Today is a bank holiday in Japan (Respect for the Aged day), which added to the weakness of JPY against USD. This week, Japan’s Trade Balance report is to be published; it is expected to show an increase to 0.41T from the previous figure of 0.34T. On the other hand, today the US published its NAHB Housing Market Index report that showed a decrease to 64 from 67 (no changes expected). Still, despite a worse report, USD was quite unbeatable and sustained the dominanted JPY, which signals that the USD is on the way to make a good climb soon. This week is going to be very volatile for USD-based pairs as FOMC Statement and Federal Funds rate report are going to be published, though no remarkable change is expected in the reports, but there is always a possibility of having great volatility with spikes in the market. This weekly close will help to determine the upcoming move in this pair for the coming days.
Now let us look at the technical view. The price has recently broken above the resistance area of 110.20-60, which has turned into the support area for the upcoming moves on the upside. Currently, the price is expected to show good bullish momentum towards 112.30 and later towards 114.40. However, ahead of the upcoming high-impact economic events, it is expected that the price may retrace to the support area to retest and then bounce back bullishly towards the resistance levels. As the price remains above the support area of 110.20-60 the bullish bias is expected to continue further.
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