Sentiment on the financial markets has been very positive this week and stock indices surged back above their 200-day moving averages, which seems to help to lift JPY crosses. The cross briefly jumped above the important 130 level and is now testing the 200-day moving average, which is located at 130.15.
Bulls pushed the cross 0.35 per cent higher during the London session on Thursday and if the mentioned 200DMA is taken out, further rise toward another strong zone at 130.80 could occur. This is a major resistance and if the pair closes above it, the outlook could switch back to bullish.
On the downside, stronger support seems to be located near the 100-day moving average at 129.50 and while above, the short-term trend could be bullish. However, if the price drops back below, bears could push the price back to 129.00.
The RSI indicators seem to be forming a rounding bottom pattern, which could be another bullish signal. The price needs to push above the 200-day average to confirm the upward momentum.
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