USD/JPY rallied and now it stands at 109.92 higher versus 109.32 today's low. It could hit a dynamic resistance soon where it could find resistance again. USD edged higher after the US data have come in mixed.
The Housing Starts indicator was reported at 1.64M higher versus 1.59M expected and compared to 1.55M in the previous reporting period. The greenback has increased even if the US Building Permits were reported at 1.60M below 1.69M estimate and versus 1.68M in May.
The Japanese Yen lost significant ground versus its rivals as the JP225 (Nikkei) has bounced back. Tomorrow, the Japanese Trade Balance and the Monetary Policy Meeting Minutes could bring more volatility and high action.
USD/JPY Amazing Rally!
USD/JPY has found strong demand around the 61.8% retracement level, below the weekly S2 (109.16) level. It has registered only a false breakdown with great separation through these downside obstacles signaling exhausted sellers.
It's trapped within a down channel, so it's premature to go long as the pair could slip lower after today's rally. Escaping from this pattern and making a consolidation could bring us a new long opportunity.
Outlook!
USD/JPY has rebounded but we don't have a good buying opportunity as long as it's located under the downtrend line. We cannot exclude a temporary decline after the current rally.
Jumping and stabilizing above the downtrend line could bring a new long opportunity with a potential upside target at 110.96 static resistance.
The material has been provided by InstaForex Company - www.instaforex.com