Keeping Long on USD/JPY As It Remains Supported by MAs

USD/JPY has been bullish since January and buyers have continued to remain in charge since then. They have been buying every pullback and since May, moving averages have turned into support on the daily chart, which shows that the upside is strongly in favour.

Early in July, the 200 SMA (purple) held the retreat and we saw a bounce from that moving average, while late in the month the 100 SMA (green) took over. On Friday, this pair tended to rally above the 143 level but the release of a soft NFP number caused traders to reconsider their expectations.

The release of jobs data which was lower than anticipated, led traders to consider the possibility that the Federal Reserve might adopt a more relaxed monetary policy and refrain from raising rates again in September. So, the retreat in USD/JPY stopped at the 50 SMA (yellow) at 152.50s, and yesterday we saw a bounce off that moving average, which shows that the buying pressure is picking up, as lows get higher.

USD/JPY reached a daily high during late US session, rising by around 100 pips to 142.60s. This upward movement was accompanied by a concerning increase in long-term Treasury yields. Specifically, the yields on US 30-year Treasury bonds have risen by 4.6 basis points (bps) during the day, reaching 4.25%. These yields had briefly fallen to 4.22% earlier, which led to a slight increase in risk appetite among traders. However, the yields started to rise once more. So, we remain long on this pair, after having opened the latest signal late last week which survived the dip and is now looking better as the price heads higher.

USD/JPY Live Chart

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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