USDJPY – bulls eye target at 108 and could extend further after eventual break and close above daily cloud base
The pair stands at the front foot on Friday and hit seven-week high at 107.67, in extension of Thursday’s rally. Easing geopolitical tensions triggered fresh risk sentiment which lifted the greenback. Yesterday’s close above 55SMA (107.05) and daily cloud base (107.16) generated strong bullish signal which was confirmed by today’s extension above previous recovery high at 107.50. Bulls now eye next pivotal barrier at 107.97 (Fibo 38.2% of 113.38/104.63 fall), with weekly close above here to generate another strong bullish signal. Further support to dollar comes from President Trump’s efforts to reach better TPP trade agreement with Japan and in combination with lowered tensions in Syria and bullish techs, could drive the pair higher for test of next key barrier at 109.31 (daily cloud top, reinforced by falling 100SMA). Broken pivots at 107.16 (cloud base) and 107.04 (55SMA, turning sideways) provide solid supports which should keep the downside protected. The pair is on track for the third straight bullish weekly close which adds to positive short-term outlook.