USD/JPY Testing above Resistance; Bullish Sentiment

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USD/JPY Testing above Resistance; Bullish Sentiment

9:00 AM (EST) Update

USD/JPY Daily: Bullish sentiment testing above key resistance level above Ichimoku Cloud.

Technical Analysis

 After ranging inside an extended triangle for over 5 months, the dollar-Yen pair finally broke above a very important psychological level and reached an 8 year high of 123,above the Ichimoku cloud and reached our first bullish target of 125.48, followed by an expected pullback. Now the pair is back on rallying with the RSI heading up above the neutrality area.

Economic Points

In the US, Fed’s Jerome Powell (voter, neutral) said that the conditions for rate liftoff could come as soon as September.

Powell stated that the US economy is experiencing a minor slowdown this year due to a stronger dollar but transient effects restraining inflation beginning to fade, while there are positive signs in labor markets.

He added that Fed forecast is for two hikes this year, September and December. He said that a percentage point this year is a possible rate path if economy grows as anticipated.

Forex Trading Idea

Bullish targeting 125.

Alternative scenario: Below 116 look for a trend change.

Where to set your stops and limits:

Support Levels Turning Point Resistance Levels
115 121.50 125
112 116 126