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Mar 17 - 10:55 AM

USD/JPY: Testing A 40-Year Old Trendline; What's Next? - BofA

By eFXdata  —  Mar 17 - 09:40 AM

Bank of America Global Research discusses USD/JPY technical outlook and sees a scope for targeting multi-year uptrend through 130-150.

"A monthly close in March above 117 will begin to look like a breakout from the declining trend for the last 30 years. Two monthly closes would be better given the test in 2015 failed to produce two consecutive closes above the line and then USDJPY topped," BofA notes. 

"A logarithmic scale price chart of USDJPY is also shown. In technical analysis, a rule of thumb is to consider log scale charts and lines in addition to arithmetic scale when the y-axis scale is greater than 30%. This method shows the resistant trend line is a touch higher at 118.20. While monthly closes above 117 will matter, so too will above this line at 118.20-117.90 in 2Q. These lines decline .10-.12 cents per month in 2Q22While closing below them, it may be an area where a top forms which remains to be seen. Breaking through the lines creates technical possibility of a large wedge bottom pattern and multi-year uptrend to, for example, 130 and even 150," BofA adds.

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Source:
BofA Global Research

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