USD/JPY: Deeper correction below 98.40

by Admin

The USD/JPY reached 99.65, supported by another enthusiastic run in Nikkei that hit and over 4 years high past Asian session. Recent rapid rise in the index due to BOJ ultra loose policy, has helped yen to accelerate lower, although is time to remember what Abe said a couple months ago, about being comfortable with the pair around 100.00. The USD/JPY has been a few pips below the mark, and may now see a downward corrective movement before attempting to run towards fresh highs above the key psychological level. 

Short term, the 4 hours chart shows indicators heading lower from extreme overbought levels, although not yet signaling a correction, as RSI remains above 70.00: price needs to break 98.40 support to see a deeper correction, which logical target comes at 97.50, the weekly opening gap. As risk remains to the upside in yen crosses further slides are seen limited, and buyers will likely take their chances if the level is reached.

On the other hand, a recovery with steady gains above 99.10 should deny the possibility of a correction, and see the pair resuming the upside, with 99.65 and the infamous 100.00 then at sight.

View Live Chart for USD/JPY