USDJPY – bulls take a breather at psychological 160 barrier

USDJPY trades just under ten-month high on Thursday, after bulls faced headwinds at psychological 160 barrier which caps the action for the second straight day.

Partial profit taking after strong rally on Tue/Wed (the biggest two-day gains since mid-Sep) is seen as likely scenario as positive momentum started to fade and stochastic entered overbought territory.

Correction / consolidation is expected be shallow as dollar remains well supported from hotter than expected inflation and increased hawkishness from Fed officials.

Dips should find ground above broken 100DMA (158.96) to keep bulls in play for fresh attempts through 160 pivot that would expose 161.00 (round-figure) and 161.33 (Fibo 76.4% of 163.94/152.88).

Persisting risk of intervention and signals that BoJ remains on track for further tightening, is expected to temper bulls.

Res: 160.00; 160.39; 161.00; 161.33
Sup: 159.48; 158.96; 158.70; 158.42