USDJPY tests the extremes of its range in a calm Forex session

Good morning for the North-American readers and nice start to the week to everyone.

The ongoing Forex session is a very calm one, as most traders brace for the upcoming US CPI data release tomorrow, with the most moving currency in the day being the AUD and NZD seeing some selling.

France is also celebrating their National Day! (Bonne fête aux compatriotes !)

Other markets have however seen some movements:

• the Singapore STI has been making records highs on its 6th consecutive session
• Bitcoin hit highs of $123,000
• Orange Juice Futures are squeezing again (up above 18% on the session, +50% since July)

Let's prepare for tomorrow's huge number by taking a look at where we stand in the current range in USDJPY as the pair has also been rising strongly in the past two weeks.

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A lack of bullish catalysts for the Yen has created a massive outflow in the currency.

The CHF is once again taking the throne for the most favored Safe-Haven major currency amid Dollar Restructuring.

The still dovish (though much less than previous years) policies from the Bank of Japan, and lack of solid hawkish communications while American rates are still at 4.50% keep giving USDJPY Buyers a fundamental edge, particularly as Dollar selling has been abating since the beginning of July.

The rebound from the 142.50 July 1st lows has been remarkable, seeing more details from the Daily chart – The 4H 50-period moving average is starting to tilt upwards, potentially giving even more underlying strength to the ongoing move.

The 4H RSI is approaching overbought but isn't there yet, with today's lack of movement helping momentum to pause which will surely be a good reason for prices to catapult upwards or downwards tomorrow – The direction is difficult to predict, but volatility is sure to be elevated.

In case of any breakout to the upside, the upcoming Resistance will be between 149.50 to 150.00

Compared to the two other times were prices visited the extremes of the range between 147.50 to 148.00, this ongoing uptrend is more progressive and stable – In Markets, more erratic, steep trends can end more abruptly therefore keep an eye on how consistent this move has been.

It could be a sign of more progressive demand for the USD and may lead to a breakout

In any way, players will be waiting for tomorrow's data release to get a better idea of US Dollar demand which will be difficult to predict.

Any fail to break the highs of the range will confirm its solidity, leading to a higher probability of retesting at least the 146.00 Resistance turned Pivot.

A spike upwards tomorrow will surely be met with some continuation amid a potential breakout to test at least 150.00.

A consolidation around these levels also may up the probabilities of a more progressive breakout.

In the meantime, before seeing the contrary, the range is to hold, but behold tomorrow's CPI 8:30 AM release which may break any resistance or support!


Safe Trades!