USDJPY rose today morning during the Asian session against the U.S. Dollar. USDJPY strikes above 105.50 psychological resistance level. Bulls to recover further? What are the charts and technical indicators are saying? Read more to find further insights into today’s USDJPY Technical Analysis.
October 20, 2020, | AtoZ Markets – USDJPY is currently trading around 105.55 area and trying to recover upside. After an extended period of volatility below 105.50 area, the bulls were able to break above the resistance with an impulsive bullish engulfing candle. As per the current price action, the bulls may face strong resistance around 106.00 to 106.10 area in the coming days.
The United States on Monday said it boycotted two Chinese men and six Chinese entities for having managed Iranian shipping organization Islamic Republic of Iran Shipping Lines (IRISL) and, at times, helping it to dodge the U.S. sanctions. However, the U.S. State division named the entities as Reach Holding Group (Shanghai) Company Ltd.; Reach Shipping Lines; Delight Shipping Co., Ltd.; Gracious Shipping Co. Ltd.; Noble (OTC: NEBLQ) Shipping Co. Ltd.; and Supreme Shipping Co. Ltd.
On the other hand, The Japanese Yen has lost 30 pips against the US Dollar on Monday. Claim for the safe-haven Yen facilitated after US House Speaker Nancy Pelosi set a Tuesday cutoff time for the White House to concede to additional fiscal stimulus.
USDJPY Strikes Above as the White House Agree to Extend Stimulus Packages
USDJPY is currently residing near 105.55 area and trying to push higher. However, the price also broke above the dynamic level of 20 EMA on the intraday chart.
Image: USDJPY 4 Hour Chart
According to the 4-hour chart, USDJPY strikes above and currently trading around 105.55 area. As per the current scenario, if the price can have another impulsive bullish 4-hour candle close above 105.45 to 105.50 area, the bulls may sustain the bullish pressure towards 106.00 to 106.10 area in the coming days. Alternatively, if the price failed to sustain the bullish pressure further and breaks below 105.50 to 105.45 area, the bears may regain momentum and may decline towards 105.00 to 104.95 support area again in the process.
In addition, the dynamic level of 20 EMA is currently residing below the price. Along with the Bollinger Bands middle band and lower band. So, the dynamic level may work as strong support to push the price upward. Besides, the Bollinger Bands middle and the lower band may work as a confluence of the dynamic level in the days ahead. In contrast, if the price rejects the Bollinger Bands’ upper band and closes below it, the bears may regain momentum.
USDJPY Bears Are Still in the Market
According to the daily chart, USDJPY strikes above but still residing below the bearish trend lines. As per the current price action, if the price pushes further upwards towards the bearish trend line and rejects with an impulsive bearish candle close, the bears may regain momentum and decline towards 105.00 to 104.95 area as a first target. The second target will be 104.20 to 104.00 area if the price can break below 105.00 to 104.95 support in the coming days. In contrast, if the price can break above 106.00 to 106.10 area with an impulsive bullish daily candle, the bulls may recover higher towards 106.90 to 107.00 area in the process.
Image: USDJPY Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing below the price, which needs to be broken with an impulsive daily bullish candle to recover upside. Also, the MACD lines are currently residing below the 0.00 level and gradually rising upward. It indicates bulls may sustain the bullish pressure further in the process. Moreover, the MACD histogram created a bullish divergence, which is another good indication of bullish continuation.
To conclude, as long as the price residing below the bearish trend line, the bias will remain bearish. A daily close is required above or below the bearish trend line to identify the definite momentum in the coming days.