May 2, 2014 – USD/JPY (daily chart) is once again attempting to rise from a key support trend line that extends back to the 93.77 low in mid-2013. Friday’s climb that occurred early in the U.S. session can largely be attributed to the better-than-expected jobs report from the U.S. Labor Department. USD/JPY has essentially been in a general consolidation since the beginning of the year, although it has been well-supported by both the noted trend line as well as the key 200-day moving average. Also providing support has been the 100.75 level, where the currency pair rebounded in early February and has not breached to the downside since.
Having followed a steadily rising trend line for almost a year, despite the recent consolidation, USD/JPY has struggled to continue the general bullish trend that has been in place since 2012. The currency pair continues to hold above its 200-day moving average and fluctuate around its 50-day moving average. If price can maintain its support base, it should once again look to target higher highs. Upside resistance targets currently reside around 103.75 and then the five-year high of 105.43 that was hit at the very beginning of this year. A move above that high would confirm an uptrend continuation, with a longer-term upside target around 108.00.
James Chen, CMT
Chief Technical Strategist
City Index Group
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