Further gains could be in the cards for USDJPY, as it has carried on its strong ascent. The 100 simple moving average recently crossed above the 200 simple moving average, confirming that a longer-term uptrend is taking place.
Price has previously consolidated and shown increased upside momentum, which could take it to the next resistance zones. The latest FOMC statement was seen as hawkish by most forex participants, as the Fed’s exit strategy is keeping the dollar in demand. USDJPY might climb up to the 110.00 major psychological level or perhaps until the next resistance zone near the 112.00 mark.
USDJPY Forex Outlook
Stochastic is still climbing, which means that buyers are still in control of price action and could push the pair further north in the near term. Meanwhile, MACD has already moved lower and may reflect a return in selling pressure soon.
In this case, USDJPY could make a correction move back to its previous resistance zones, which might hold as support moving forward. A potential pullback to 105.00-106.00 might be seen and a bounce from this area could confirm that the uptrend is still valid. A deeper correction could take USDJPY down to the 100.00-101.00 support area.
For now, traders are banking on the strong bull run for USDJPY, as the difference in monetary policy outlook could lead to the formation of newer highs. Analysts appear to be eyeing the 110.00 region as the next resistance area before profit-taking is seen while others are casting their sights on the 115.00 zone.
A recovery in the Japanese economy might be enough to keep the rally subdued, but it will take some time before the latest quarterly figures are printed. More weakness in Japan could keep this pair grinding higher while a downturn in the US economy might also wind up erasing some recent gains.
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