USDJPY hit new multi-decade high above 160 on Wednesday, as bulls regained control after a two-day consolidation.
Fresh probe above psychological 160 barrier suggests that bids remain strong despite warning that Japan’s authorities may intervene to support weakening national currency, with 160 zone seen as a likely trigger.
Strong bids were also signaled by long tails of May / June monthly candles, while dollar remains underpinned by wide gap between monetary policies of Fed and BoJ.
Bulls also ignore overbought conditions on daily chart, with initial bullish signal expected on close above 160 level that would unmask targets at 162.16 /163.38 (Fibo projections) and 164.00 (Oct 1986 high).
Rumors that the Japanese authorities raised the red line for intervention towards 170 zone, may add to fresh bulls to sustain gains above 160.
Initial support lays at 160.00, followed by 159.60 (today’s low / 5DMA) and rising 10 DMA (158.64) which should keep the downside protected.
Res: 161.00; 162.16; 163.38; 164.00.
Sup: 160.00; 159.60; 158.64; 157.70.
