USDJPY Bullish Trend Re-Energized, But Correction Risk

Technical Analysis

A further advance Tuesday through 125.00, but then a notable decline for a bearish outside pattern to leave risk lower into midweek.

However, having pushed above the high from 2007 at 124.15 to a new 12 year high, we see this setback activity as corrective in nature and still see the May breakout rally intact into early June.

For Today:

  • We see a downside bias for 123.47/42; break here aims for 122.76.
  • But above 124.50 opens risk up to 125.05.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 125.81, the 2002 peak.
  • Above here targets 129.08 and 130.00.

What Changes This? Below 121.53 eases bull risks; through 120.64 signals a neutral tone, only shifting negative below 118.86.

Momentum: The 8-day RSI, short-term momentum is rising and has scope to go still higher this week.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.