USD/JPY “bullish bat” pattern formed on USD/JPY, good to go long on dips
- USD/JPY has completed a ‘Bullish Bat’ pattern, scope for further upside seen.
- US dollar strengthened post FOMC meeting. Fed said they expect economic conditions to evolve in a manner that will warrant further rate hikes.
- After consolidating breach of slopping channel seen last week, the major failed to extend downside.
- RSI and Stochs have rolled over from oversold territory raising scope for upside.
- Price action has broken above 5-DMA at 109.00 and is currently hovering around 23.6% Fibo.
- Next bull target lies at 110.37 (nearly converged 38.2% Fib and 21-EMA) ahead of 20-DMA at 110.56.
- On the downside we see immediate support at 5-DMA, breach there will see resumption of downside.
- Focus now on nonfarm payrolls, ISM manufacturing PMI for further impetus.
Support levels – 109 (5-DMA), 108.60 (Aug 18 low), 108.26 (Aug 29 low)
Resistance levels – 109.57 (23.6% Fib 113.572 to 108.282 fall), 110, 110.37 (nearly converged 38.2% Fib and 21-EMA)
Source: FXWire Technicals