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USD/JPY Today Technical Report 05/05/2016

USD/JPY started trading higher on Tuesday after it hit support near the 105.50 (S2) level. On Wednesday the pair continued higher and hit resistance at 107.40 (R1). Then the pair pulled back and during the Asian day today, it rebounded. Currently, the rate is headed for another test at 107.40 (R1), where a decisive break is likely to initially aim for the 107.80 (R2) zone. Another move above that zone could open the way for the 108.70 (R3) hurdle. Our short-term oscillators support that the pair is possible to continue trading higher in the near term. The RSI edged higher and is now testing its 50 line, while the MACD, although negative, stands above its trigger line and looks to be headed towards zero. Switching to the daily chart, I still see a longer-term downtrend. As a result, I would treat the recovery from 105.50 (S2), or any extensions of it, as a corrective phase for now.

YEN 5

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