- USD/JPY bullish continuation pattern into play.
- US dollar rose despite improved risk appetite.
- FOMC minutes eyed next, to provide more clarity to the price action
USD/JPY is witnessing range-bound action today near the 105.80 resistance area as the US dollar pullback, and the rallying Treasury yields send mixed signals.
Market sentiments were better today than the overnight US session after Trump moved forward with a partial stimulus calling on the lawmakers to agree on airline support and paycheck protection.
The US dollar’s haven-linked appeal has fewer takers today after the development on the stimulus bill while the Treasury yields rose higher along with equities. The FOMC minutes will be keenly watched by traders later in the US session for further direction in the USD/JPY.
The 50-day moving average around 105.78 is acting as a resistance for the pair on the upside. A close above this critical level will help the bulls to target 106.19.
USD/JPY has been trading inside a falling-wedge pattern since the middle of June. It is now knocking on the top of the wedge—the buying mood boosted by the 14-day RSI reading above 50.
Suppose the pair successfully post a daily close above 105.75 – above the falling trendline resistance. In that case, a bullish-breakout will be confirmed, and the 100-day simple moving average around 106.55 will be under attack.
On the other hand, a sell-off will find 105.45 as strong support, and if broken, bears will put Monday’s low of 105.27 in play.
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