There is certainly nothing impulsive about the recent gains in USD/JPY, unlike the March rally, but that is probably to be expected when we are in such a long term downtrend. Technically though the market looks quite constructive and if you’re looking for a long USD trade, then USD/JPY looks promising in my view.
The vertical rally from 76.25 to 85.55 retraced 61.8% to 79.80 (plus a marginal overshoot) so this is the first bullish sign. Remember also that we are historic lows so there’s definitely a strong argument for the Yen being overvalued. The short term MAs have also turned bullish so the signs are there in my opinion that we should be in a dip-buying mood in USD/JPY.
Next resistance of note is the 100-day MA at 82.25 with support just below 81.00.
