New long-term highs were made in the USD/JPY currency pair yesterday, as financial institutions absorbed another round of information from the U.S Federal Reserve.

Yesterday’s trading in the USD/JPY saw the Forex pair reach ultra long-term highs near the 137.800 vicinity. Intriguingly the upwards trajectory displayed yesterday was not extremely violent, unless ‘a trader’ happened to be on the wrong side of the price action. The USD/JPY continues to demonstrate a strong bullish trend which until proven otherwise could prove unfortunate to be wagering against. The trend upwards has been incremental.

Long Term Bullish Trend of USD/JPY is Likely Not About to Erode Quickly

Certainly, at some point in the future the USD/JPY will likely start witnessing an erosion of value.  However, the current economic environment is causing a dynamic swirl of confrontation regarding central bank policies between Japan and the U.S, this while inflation is being confronted internationally. The Bank of Japan continues to remain dovish and the U.S Federal Reserve is voicing hawkish rhetoric.

• U.S Federal Reserve Meeting Minutes point to another rate hike the last week of July.
• Bank of Japan continues to voice a dovish interest rate policy and is likely to remain stubborn.

Technical traders do have the ability to also monitor the USD/JPY via extremely long-term charts, and see historically the USD/JPY has traded at higher vantage points. This is not the first time the currency pair has seen such levels; today’s prices are still below the highs of 1998. Technical traders may want to note the USD/JPY touched a mark of nearly 147.750 in August of 1998. That is not to say the USD/JPY will find this value again, it is merely to note the potential exists for greater heights and should not surprise speculators.

Additional Buying Could be Ignited if the 138.000 level is Toppled

Psychological price levels will have a strong influence within the current pace of price velocity of the USD/JPY currency pair.  If the USD/JPY begins to show an ability to move above the 137.500 level and sustain this value, speculators will no doubt start to eye yesterday’s highs and may believe the 138.000 mark is going to be challenged sooner rather than later. If the 138.000 level is flirted with and surpassed this could open the door for an additional wave of buying.

Speculators who prefer to be conservative cannot be blamed, but perhaps they should not be contrarian.  Selling the USD/JPY and looking for reversals lower could prove to be very dangerous still. Yes, the USD/JPY could turn lower rapidly, but it is unlikely that a massive selloff will erupt in the coming days. It is more likely that moves downwards will spark a rebound and potentially higher prices. The lack of a unified central bank interest rate policy among the major nations – U.S and Japan included, will likely remain a focal point for a stronger USD near term.

USD/JPY Short-Term Outlook

Current Resistance: 137.530

Current Support: 136.980

High Target: 138.210

Low Target: 136.640

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The USD/INR touched new highs in early trading today as the currency pair continues to show signs of its bullish trend remaining strong.

Speculators of the USD/INR may be tempted to wager against the upside action the currency pair is attaining. However, under the present trading conditions of the USD/INR, selling positions should not be overly ambitious. Speculators shorting the USD/INR should only hope to pocket quick hitting profits based on the notion that reversals downward could prove to be temporary. Seeking a strong move lower could prove expensive short term.

Record Prices may Have Additional Roam to Traverse Higher Near Term for USD/INR

Traders who are simply looking to buy the USD/INR do need to be careful. Yes, the move higher has been impressive, but staying realistic is important while speculating in Forex. The move over the 79.0000 has been accomplished with a strong amount of momentum and psychologically speculators may be targeting the 80.0000 mark, but the next run higher may not ignite short-term.

If the 79.7000 Level is Surpassed Traders may Look for 80.0000 Psychologically in the USD/INR

While traders cannot be blamed for believing the 80.0000 is a legitimate goal, being able to time the potential rise could be difficult and costly if the USD/INR doesn’t produce the results wanted fast enough. Realistic targets are important while trading. Looking for technical resistance levels are difficult when record highs are being made, but waiting for slight reversals lower and anticipating a rebound higher which aims for resistance levels accomplished earlier in the day can prove to be worthwhile sometimes. Aiming above the higher marks needs patience and ability to emotionally remain calm.

• Record highs in USD/INR make the search for resistance difficult, but using price reversals lower and then aiming for recent highs is a realistic goal.
• Volatility as the USD/INR traverses new highs should be expected.

The mark of 79.6000 in the short term appears to be proving durable as resistance, but if this mark is toppled speculators could begin to look at the 79.7000 and 79.7500 levels as realistic. The USD/INR is historically a currency pair that delivers a significant amount of volatility with spikes suddenly erupting, particularly when the USD/INR receives its first initial wave of trading during each day. Today’s move higher was accomplished via a strong surge upwards early in the morning.

The USD has been strong across the board in Forex yesterday and today. The USD/INR may continue to see a swirl of activity in the near term as financial houses looks for equilibrium and consider the next moves by the U.S Federal Reserve and its implications for currency pairs. Traders looking to buy the USD/INR cannot be blamed, but stop loss and take profit orders should be used to make sure risk-taking tactics remain practical and do not result in costly mistakes. Record values sometimes lead to violent trading in Forex and the USD/INR may not be immune to this type of behavior.

USD/INR Short-Term Outlook

Current Resistance: 79.6300

Current Support: 79.3900

High Target: 79.9800

Low Target: 79.0300

GS

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