Even as the Federal Reserve announces a 50 basis point rate hike, the USD/JPY breaks out of its range bound price action from earlier this week. The exchange rate may experience a larger pullback in the coming days as the central bank states that a “75 basis point increase is not something the committee is actively considering.”
Taking a look at the higher period charts of USD/JPY, it can be seen that the price is smoothly moving inside the boundaries of an ascending channel. Monitoring the price activity, it can be determined that the price will most likely visit the region shown on the graph (129.2) before blasting to the upside and reaching the zone of the current Higher High. There are three confluences neatly lined up and recommending a BUY from the 129.2 zone of support. Firstly, the zone functions as a former zone of opposition afterwards converted support. Secondly, the same zone beautifully corresponds with 50 percent Fibonacci retracement level, which provides us another confluence. Last, the lower barrier of the ascending channel beautifully meets with two previously indicated places of confluence.

The price is trading above the Pivot Point of 129.10, which is located at 128.92 and 129.45, respectively. The EMA 10 is advancing horizontally above both the EMA 100 and the EMA 200. Both the 100 and 200-period EMAs are moving with uptrend. When the RSI is going toward the 50 level, the MACD histogram moves into the red zone. And the Stochastic is moving in the oversold zone with a buy signal. There is not a clear signal in the ADX. The price is inside the Ichimoku Cloud and the Chinkou Span is near the market price. A bearish trend may be seen in the Tenkan- and a bullish one in the Kijun-sen indicators.

• There is resistance at 129.45, followed by resistance at 129.63 and 129.98.
• There is support at 128.92 Below, there is 128.57 and 128.39.

Note: We do not suggest any investment advice, and these analyses are just to increase the traders’ awareness but not a certain instruction for trading.