Bulls look for further upside but markets remain cautious about possible intervention
USDJPY keeps firm bullish tone and trading near new multi-month high in European session on Tuesday, as bulls regain traction after pausing on Monday.
The pair stays above broken pivotal Fibo barrier at 142.50 (61.8% of 151.94/127.22) for the fourth consecutive day, which adds to bullish outlook.
Near-term action remains supported by bullish daily studies (strong positive momentum / MA’s in full bullish configuration), though overbought conditions warn of extended consolidation before bulls continue.
Bulls eye next target at 146.10 (Fibo 76.4%) which guards Oct 31 lower top at 148.84 and psychological 150 barrier.
However, traders remain cautious following recent comments from Japan’s official about possible intervention to stop yen’s slide, mainly driven by wide gap between Fed and BOJ’s monetary policies.
Japan is keeping on the table all available tools and signaled readiness to act and protect the currency from further slide, with trigger for action seen on USDJPY’s rise above 145.00 level.
Broken Fibo barrier at 142.50 reverted to solid support, along with nearby rising 10DMA (142.15), with break of these levels to sideline immediate bulls and signal deeper pullback towards 140.93/84 (former top of May 30 / 20DMA) and psychological 140.00 support.
June 1 higher low (138.43) marks key near-term support, loss of which would signal reversal and open way for deeper fall.
Res: 143.87; 144.56; 145.10; 146.10
Sup: 142.94; 142.50; 142.15; 141.86