USD/JPY surges to 114.00 amid Abe’s victory
Morning outlook - USD/JPY surges to 114.00 amid Abe’s victory
In accordance with experts’ expectations, the Japanese Prime Minister Shinzo Abe and his Liberal Democratic Party secured their seats for another term. Anticipation and confirmation of this result led to sharp appreciation of the Dollar against the Yen, allowing the pair to reach a new cellar at the 114.00 mark. This advance signified a breakthrough through the upper resistance line of large falling wedge. This fact allows assuming that the buck is going to continue strengthening at least until the clash with the monthly R1 at 114.75. But in shorter perspective the pair is likely to return back to the 113.35 mark and make a rebound from the bottom edge of a junior ascending channel that will be backed up by the rising 55- and 100-hour SMAs.
In accordance with experts’ expectations, the Japanese Prime Minister Shinzo Abe and his Liberal Democratic Party secured their seats for another term. Anticipation and confirmation of this result led to sharp appreciation of the Dollar against the Yen, allowing the pair to reach a new cellar at the 114.00 mark. This advance signified a breakthrough through the upper resistance line of large falling wedge. This fact allows assuming that the buck is going to continue strengthening at least until the clash with the monthly R1 at 114.75. But in shorter perspective the pair is likely to return back to the 113.35 mark and make a rebound from the bottom edge of a junior ascending channel that will be backed up by the rising 55- and 100-hour SMAs.
Comment:
USD/JPY fluctuates in ascending triangle
A number of failed attempts to break through the 114.00 resistance level as well as inability of the rate to slip below the rising 55- and 100-hour SMAs confirmed an assumption that the pair is fluctuating in an ascending triangle pattern. A release of information on the US Core Durable Goods Orders later this day provides a good opportunity to make a breakout from it.
At the moment, the northern side looks more reliably secured due to additional barrier set up by the weekly R1 at 113.19. The southern side, in contrast, is protected only by moving averages, which are located quite far away from each other. In addition to that, there is a need to take into account that the average market sentiment is 61% bearish.
A number of failed attempts to break through the 114.00 resistance level as well as inability of the rate to slip below the rising 55- and 100-hour SMAs confirmed an assumption that the pair is fluctuating in an ascending triangle pattern. A release of information on the US Core Durable Goods Orders later this day provides a good opportunity to make a breakout from it.
At the moment, the northern side looks more reliably secured due to additional barrier set up by the weekly R1 at 113.19. The southern side, in contrast, is protected only by moving averages, which are located quite far away from each other. In addition to that, there is a need to take into account that the average market sentiment is 61% bearish.
In general the rate faced no resistance levels up to the mentioned 114.00 mark, as it was being driven higher by the support of the 55-hour SMA. Moreover, the SMA was supported by the ascending lower trend line of the dominant medium scale channel up pattern.
Due to that reason it is assumed that the 114.00 mark will be reached once more.