USD/JPY Recovery Gains Momentum to Reclaim 108.00 Level
The USD/JPY
bulls extended the pair's firm bid tone, pushing the pair through
108.00 handle for the first time since late April to a 2-week high level
of 108.37.
The pair's sharp move on Monday was on the back of
comments from Japan’s finance minister Taro Aso that the ministry is
prepared to intervene if the exchange rate volatility remains at an
elevated level and specially if the Yen starts strengthening again. The
recent decline in the USD/JPY pair has been a key concern for the
Japanese policy makers as a stronger domestic currency makes exports
less competitive.
The pair has now broken-out of a short-term
ascending trend-channel formation on H1 and hence seems more likely to
build on to its recovery momentum.
Technical levels to watch
The
pair's ongoing momentum is likely to get extended and now seems to aim
towards testing 20-day SMA resistance, currently near 108.80 level,
which if cleared should further boost the pair beyond 109.00 handle,
towards its next major resistance near 109.40-45 zone.
On the
downside, 108.00 round figure mark now seems to protect immediate
downside. Any subsequent weakness below this immediate support might now
be limited by support near 107.60-50 area.
