Risk Appetite Returns, USD/JPY Tests 95.00

The USD/JPY has been climbing steadily as the Yen has been falling against the U.S. Dollar. This movement reflects the week-long rally in the U.S. Equities markets enjoyed a rally last week as the Dow Industrial Average broke 9,000 for only the second time this year.


Risk appetite in the stocks has translated into a yen sell-off which saw the USD/JPY bounce from 93.00 support to now testing the resistance area of 95.00 to 95.30.





The 30 minute chart shows this climb within a Continuation Rising Wedge pattern with horizontal support along 94.60 and uptrend line support (blue) currently at 94.88. If the equities rally continues look for the USD/JPY to continue higher with the pattern and test resistance at 95.60. Any near term correction could set up a corrective buy off uptrend line support.


The big picture of course is the daily time frame as that psychology is the one that will be most watched. The daily chart is currently moving within a wide but well-formed Continuation Channel Down. The pattern is not angled sharply downward however the level to watch if the equities rally is sustained throughout earnings season would be the 97.50 area as that is where the downtrend line resistance and breakout level is currently at. That level may seem far away now but it would be roughly the same amount of pips that the USD/JPY rallied last week.





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