USD/JPY to Continue Rising

on May 13, 2013
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After sailing past 100 last week, the USD/JPY has continued it march upwards, reaching 102.055 at the start of European trading. The pair is presently residing at 101.56, but a further rise is expected during the day. The rally could reach the 103.16 level, and ultimately 105.00 which is a psychological target level that traders will be looking for.

The pair has so far been pushed up by a number of factors which has made it attractive to the bulls including a rise in U.S. yields, new highs in the Nikkei and Japanese purchasing of foreign bonds. Kathy Lien of BK Asset Management opined that if the Bank of Japan successfully achieved its two percent inflataion target, this “would be consistent with a USD/JPY level of 104/104.50”. Lien also said that, given the magnitude of the BoJ’s actions, BK Asset Management expected the pair to hit at least 103, with a possible extension to 105.
Greg Gibbs, a currency strategist at RBS, also expects that the rising trend will be persistent, though not as rapid as earlier in the year.
In case the pair begin to slide, daily support levels have been placed at 101.08, 100.82 and 100.57. Conversely,resistances are at 102.54, 102.80 and 103.06.

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