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On Wednesday, USD drifted lower versus JPY but retreated from the 200-day SMA support after the Fed stuck to its easy monetary policies to stimulate the US economy.
As was expected in previous report, the bullish momentum for the currency was likely to continue towards 80.50 level in the near-term. On Thursday, JPY stayed under pressure against USD amid speculations for further monetary easing next week by the BoJ. USD rose to surpass the high hit in early July against JPY. The pair is currently quoting at a four month high of 80.10.
Now on the downside, the 200-day SMA near 79.70 is seen as immediate support for the currency pair followed by a very strong support near 79.20 – 79.25 zone, representing the 61.8% Fibonacci Retracement Level of its 80.62 - 77.12 move.
On the upside, 80.50 – 80.60 zone – high struck in June this year, is likely to prove important hurdle for the currency pair.
Moreover, technical indicators like RSI (above 70) and Stochastic Oscillator (above 80) indicate that the recent price action has now created overbought conditions and a modest short-lived pullback or consolidation near around the 200-day SMA area cannot be ruled out.
Should the pair manage to strengthen and sustain above 80.50 – 80.60 strong resistance zone, the short-term up-ward momentum seems to get extended towards 81.65 – 81.75 resistance zone in the near-term.
Haresh Menghani
Market Analyst
Admiral Markets
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