USD/JPY eyes ¥103
The move back above the 200-day moving average in USD/JPY seems to confirm the idea that this currency pair is minded to hit ¥103 once again, a major hurdle since the beginning of May.
Any close above this area would put ¥104 back in focus, and with the Bank of Japan probably facing some more declining economic growth the advantage still lies with the US dollar.
At some point, it would be pleasant to see USD/JPY break from its current trading range, which at the moment is defined by ¥101- ¥103. Apart from two spikes above ¥103 in March and April, the range has remained intact since the beginning of February.
With geopolitical tensions easing, safe haven demand for the yen has abated, while the prospect of more quantitative easing from the Bank of Japan will leave the yen looking less attractive.
The move higher in the daily RSI gives the impression that this move has legs, meaning that traders should keep a close eye on ¥103. The turn higher in the weekly stochastic momentum indicator is another sign that there is strength behind the current price action, giving preference to long positions.