USD/JPY: Testing Key Support Levels for Continued Bullish Momentum
08 October 2024
In today's technical piece, we focus on the American dollar to Japanese yen (USD/JPY) pair. The U.S. dollar remains influenced by last week's Non-Farm Payrolls, which initially bolstered the currency but has since undergone a correction. However, this correction appears to be a normal market adjustment, and we anticipate the bullish sentiment toward the dollar to persist.
The technical setup on the USD/JPY chart supports this bullish outlook. We can observe a well-defined inverse head and shoulders formation, highlighted by the black rectangle. The price recently broke through the neckline of this pattern, marked with a green line, and subsequently retested it as support. Additionally, the price has broken above the orange horizontal resistance, which is now being tested as a support level. The positive bounce off this level indicates that buyers are stepping in.
The recent pullback looks like a typical correction, suggesting that as long as the orange support area and the green neckline hold, the bullish sentiment should dominate. We are expecting further upward movement in this pair as the buying pressure builds.