USD/JPY Chart Analysis: Rate Hits Autumn High
Todays USD/JPY chart indicates that the U.S. dollar has strengthened against the yen by over 6.6% since the beginning of the month. Starting this trading week, the rate has surpassed 153 yen per dollar, a level not seen since August 31.
This bullish sentiment towards the dollar has been driven by the outcome of Japans parliamentary elections over the weekend. According to Reuters, investors believe that the loss of the ruling coalitions majority in Japans parliament reduces the likelihood of a future interest rate hike, contributing to the yen's weakening.
On October 10, there was speculation that bears might halt the October rally (marked by the blue channel) and guide the rate back down within a descending channel from its upper boundary (marked in red), with the psychological level of 150 yen per dollar acting as resistance.
However, bulls maintained their momentum (which originated from the psychological level of 140 yen) and continued the rally, breaking through this resistance. Per USD/JPY technical analysis, the 150 yen level may now serve as a support line.
The RSI indicator currently suggests the formation of a potential bearish divergence, hinting that a slight correction might occur as the market anticipates key upcoming news, which could heavily influence the sustainability of the current USD/JPY rally:
The Bank of Japans interest rate decision, expected on Thursday
Key U.S. labor market data releases scheduled for later in the week
Read more: https://fxopen.com/blog/en/oa-usd-jpy-chart-analysis-rate-hits-autumn-high/
Text source: Forex Trading Blog
