USD/JPY started the month with the long awaited and expected long term trend’s retracement. The retracement was a sharp one towards 79.50 level and broke a long series of short range moves. The USD/JPY has touched the top of downward channel and long term traders will now looking to sell USD/JPY around 79.00 level for initial dips towards 77.00 level and break further below that level will take USD/JPY towards 76.00 level. On the upper side break above 77.50 level will open up long term upward trend and targets. The Intra-day traders might look to hold out a little before USD/JPY sets itself up for any particular direction.
Looking at the moving averages used in weekly charts, it can be seen that USD/JPY has managed to break above the medium term moving average and now is looking to target long term moving average which is around 80.50 level. Only if USD/JPY manages to break above 80.50 level, then the long term upward trend will be confirmed as the current move can be still termed as the retracement. RSI is around 67 in daily charts which is a bit on the higher side and will push USD/JPY downwards to open up some space for USD/JPY
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