USD/JPY Price Analysis: Brace for a volatility expansion, 146.00 a key hurdle
- Cheerful market mood and geopolitical tensions are keeping USD/JPY in a chartered territory.
- Advancing 20-and 50-EMAs add to the upside filters.
- A fakeout formation has tilted odds in favor of inventory accumulation.
The USD/JPY pair is displaying topsy-turvy moves in the Tokyo session as the risk-on impulse is defending the downside while the upside is capped due to Japan-North Korea geopolitical tensions. The major has traded in 114.40-114.70 in the Tokyo session and is likely to continue its consolidation till the availability of a potential trigger.
On a four-hour scale, the major is auctioning in an inventory adjustment process, which indicates a tad longer consolidation period. It is critical to state that the adjustment process is an accumulation or distribution by institutional investors. However, the formation of a fakeout has tilted the odds in favor of further accumulation.
The 20-and 50-period Exponential Moving Averages (EMAs) at 144.53 and 144.33 respectively are advancing, which adds to the upside filters.
While the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead.
Should the asset manages to overstep September 22 high at 145.90, the greenback bulls will drive the asset towards August 1998 high at 147.67. A breach of the latter will send the major towards the psychological resistance of 150.00.
For a decisive bearish reversal, the asset is required to drop below September 22 low at 140.35. An occurrence of the same will drag the asset towards the August 30 low at 138.05 followed by the August 23 low at 135.81.