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USD/JPY remains above 200-DMA
It is another busy week for USD/JPY, which in itself will provide plenty of catalysts for both currencies, but overall the US dollar still seems to have the upper hand.
Although the dollar has edged back from the gains made in the wake of the Federal Open Market Committee decision last week, the pair is still trading at its highest level since the beginning of June and remains above the 200-day moving average.
Today is relatively light on the economic front, but a steady grind of data including US PMIs tomorrow and then the Bank of Japan statement on Friday, will keep this currency pair in focus all week. Tomorrow’s ISM non-manufacturing reading is expected to edge higher, which may prompt another round of dollar buying.
The immediate targets for USD/JPY are ¥103 and ¥104, while those with a longer-term view will be looking towards the 2014 high of above ¥105.
A drop through the 200-DMA would signal yet another retest of the support zone provided by ¥101. With the daily relative strength index having moved out of overbought territory last week, the upside scenario has greater weight to it.
As a reminder, the weekly chart still shows an extended uptrend in progress, with the 20-week MA still holding above the 50-week. Weekly stochastics are also giving a bullish reading for the first time since early November of last year.