USD/JPY rebounds from monthly S1 at 108.48
Morning outlook - USD/JPY rebounds from monthly S1 at 108.48
- In accordance with expectations, most of the previous trading day the currency rate spent in an upward movement, using the weekly and monthly S1, as trampolines. Despite such rebound, the further road to the north is still obstructed by the 100- and 200-hour SMAs and then by the weekly and monthly PP.
- For this reason, today the pair is expected to resume the fall and once again to try to break through the above weekly S1 at 108.80.
- In the meantime, there is a need to take into account a certain effect that might appear after publication of data on the Japan’s Final GDP at 23:50 GMT.
- Finally, there is also a need to remember that the rate is simultaneously moving in a senior descending channel and still hasn’t formed a new reaction low.
Even though a release of information on the Japanese GDP was worse than analysts anticipated, the last day of the week the currency pair started in a sharp downfall.
To certain extent, this breakout from a dominant descending channel was triggered by a combined resistance level set up by the weekly and monthly S1 as well as the 55- and 100-hour SMAs.
As a result, the next two likely targets for the pair will be the weekly and monthly S2 at 107.33 and 106.98. But starting from the next week, the buck most probably will try to restore some of the lost positions.
However, there is a need to take into account that development of this currency pair will quite strongly depend on geological situation surrounding North Korea.