USD/JPY at a three-month high, time to sell the fact?
USD/JPY is currently up 0.32% at 113.84 and a three-month high having opened at closed NY at 113.51, a bullish gap on the Abe victory before official voting ends at 11.00GMT.
- Abe: on track for a big majority, 1hr to the official voting ending 11.00GMT
- JPY: Another landslide victory for Abe: more of a relief yen-cross rally to go? - Nomura
- US wrap: DXY rallied against nearly all in the G10 - ANZ
- Japan Elections: Look for a higher USD/JPY – Danske Bank
However, when Australia/ Tokyo full markets come online, will there be a covering on a take profit scenario, considering the majority of the financial markets had already seemingly priced in the victory, selling the fact scenario?
This is seen with the Nikkei 225 already up to 21 plus year high. For the Yen, it is not a favourable scenario so USD/JPY, in theory, should remain on the front foot at the start of the week, so levels will be key.
USD/JPY levels
Support levels: 113.10 112.60 112.20
Resistance levels: 113.60 114.00 114.40
Valeria Bednarik, chief analyst at FXStreet explained that the chart shows that the price settled well above its 100 and 200 DMAs which stand horizontal and within a tight range around 111.20/40, as technical indicators head north, the Momentum within neutral territory, but the RSI currently at 63.
"Shorter term, and according to the 4 hours chart, the downward potential is well limited as the price develops well above its 100 and 200 SMAs, but further gains are still unclear, as indicators lost bullish strength, holding anyway within positive territory. An upward acceleration through 113.60, however, could lead to a test of the major resistance area around 114.40, where the pair topped in May and July," Valeria added.