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Jun 29 - 01:55 PM

USD/JPY - COMMENT-USD/JPY Using May-June Double-Bottom As Springboard For 108 Breakout

By Randolph Donney  —  Jun 29 - 11:40 AM

USD/JPY made a major double-bottom with June's 106.075 EBS-low holding just above May's 105.985 low, and now has hurdles by 108 in its sights and a flock of moving averages as support.

Prices have cleared the 10, 21, 30 and 55-day moving averages and look headed for the 100-DMA at 107.95 and the 50% Fibo of June's 109.85-106.075-EBS slide at 107.95/96.

Today's advance gained traction above the 38.2% Fibo and the June 16 rebound high at 107.64, that after the session low held the 10-DMA at 107.04.
The 10-DMA is starting to turn up and tight Bolli bands are expanding in confirmation of the uptrend.
Targets above 108 include the 61.8% Fibo and Tuesday's daily cloud top at 108.41/43.

The options market is short gamma above 108 until Thursday, when a $1.1bln 110 expiry comes into play following the U.S. employment report and ahead of the holiday weekend.

Prices may also have help from the rebound in IMM net spec shorts the preceding two weeks, with last Tuesday's reporting day also the day the double-bottom was made.
The increase in shorts occurred in the 108.55-6.075 range.
Thus the 61.8% Fibo at 108.41 looks like a pain point for shorts.
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Refinitiv IFR Research/Market Commentary


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