The USDJPY pair has broken higher overnight, with the easing of tensions with North Korea. The regime has softened its approach and reached out with a suspension of nuclear weapon and missile tests. The BOJ has left rates on hold and continues its yield targets for JGBs. This has led to a break above trend line resistance at 106.385 to test the 107.000 level. Momentum carried the price above the 100-period 4-hour MA at 106.778 but it has since moved back below this level, which is now being used as resistance. Price is currently testing 106.712, with a break below finding support at 106.300 and the 50-period MA combined with the two trend lines shown. A successful retest of this breakout level targets 108.277 and the trend lines at 108.440 and 108.600. There is further resistance at 109.052 and 109.772, followed by the 110.000 level.
Support can be seen at 106.030, with rising trend line support at 105.768. Wednesday’s low is found at the 105.504 level, with the previous low at 105.243. The 105.000 level is acting as a strong supporting area.
The German Index has seen price rally higher from 11728.70 on Monday, putting in a strong reversal for the week. This, in the context of recent price action, unfortunately, means very little so far, as all major levels remain untested. From a resistance perspective, the falling trend line at 12583.00 needs to be tested and overcome to give the bulls hope of driving higher. Above this area, the 200-day MA is found at 12621.00, with the 50-day MA at 12633.6. The 100-day MA is at 12750.00 and a break above here targets the 13000.00 area. A strong push above this area, linked to global bullish sentiment, can support a move to the old highs at 13600.00.
Support is found at the 12000.00 area, with a loss of this area suggesting that a lower high has been formed and that there is potential for a lower low, with a break below 11681.2. Targets in extension below this area come in at 11444.00 and 11300.00.