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USDJPY technical analysis

USDJPY Tech analysis by Simon Kazinsky on 10:33 November 11, 2014 EST

USDJPY is setting a new multi year high today.

We mentioned in our previous reports when a dollar cost around 106 yens -here and here- that any drop in this pair should be viewed as a correction and that price action should move north in the days and weeks ahead. I identified the area around 117 to 120 as a likely target and it is now, earlier than expected, than this mark seems likely to give way.

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On a shorter time frame the momentum is clearly upwards but, considering longer time frames, we can see that the present spot price diverges substantially from its long term moving averages to the point where, in previous instances, it has either paused or corrected the move.

With this in mind it is probably a good time to book profits on part of the buy positions and wait for a correction to jump back in again. The long term bullish bias remains as long as price is above 103.