What a fakeout!
After spiking below support, USD/JPY found itself back inside its range on the 4-hour time frame.
Can it bounce off the top again?
USD/JPY 4-hour Forex Chart by TradingView
The September FOMC announcement kept traders on their toes, as the central bank cut interest rates as expected while Fed head Powell downplayed concerns about the labor market.
In effect, the dollar tumbled then quickly recovered, taking USD/JPY briefly below its range support near S1 (146.44) then sharply back above it.
Does it have enough upside momentum to break above the resistance, too?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/JPY is now closing in on the top of the range around the 148.50 minor psychological mark and R1 (148.71), possibly gearing up for another rejection that could keep it moving sideways.
If so, look out for another move back to the range support or at least until the pivot point level (147.51) close to the dynamic inflection points at the moving averages.
On the other hand, a bullish break of the ceiling could trigger a rally that’s the same height as the range or a climb to the next upside target at R2 (149.78).
Keep your eyes and ears peeled for the BOJ decision and press conference that could spark additional yen volatility.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
