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Forex: USD/JPY moves above descending trend line; hits 87.50

By FXstreet.com,  January 08, 2013, 09:36:00 PM EDT

FXstreet.com (San Francisco) - The USD/JPY rally appears to have found a short-term roof at 87.50 from earlier session lows near 86.81, and, at the time of writing, has peaked at 87.53 intraday, last quoted at 87.45. Price appears to have punched through a descending trendline around 87.30 (drawn from 88.10 to 87.79) in the past hour or so. The hourly and 4-hour timeframes depict an RSI still in neutral territory, at 54 and 52, respectively, suggesting there may be room for further bullish activity.

Eamonn Sheridan, editor at Forex Live explains what has been driving this recent price action: "There has been EUR/JPY buying in the market (I've heard Asian central banks prominent in the buying - make of that what you will) helping to lift USD/JPY."

Mr. Sheridan continues: "I also think the market has been quick to want to short USD/JPY, looking for some deeper retracement of the big run up over the Christmas/New Year period - so there has been forced short-covering on this move higher in USD/JPY this morning too."




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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