USD/JPY Goes Ballistic, Pulverizes Key Fib Resistance, S&P 500 Wavers at 4,200

USD/JPY TECHNICAL ANALYSIS

The U.S. greenback rallied at the beginning of the week, bolstered by surging U.S. Treasury yields following the discharge of the U.S. ISM manufacturing report, which confirmed a leap within the employment and costs paid elements of the survey. In this context, USD/JPY superior greater than 0.8% to ~137.40 in afternoon buying and selling, reaching its finest stage since early March.

USD/JPY’s technical outlook has turned extra constructive after the change fee breached confluence resistance positioned at 136.60 on Monday, an space the place the higher sure of a short-term rising channel aligns with the 200-day easy shifting common and the 38.2% Fibonacci retracement of the October 2022/January 2023 selloff.

If pair holds above 136.60, bulls might grow to be emboldened to launch an assault on the 2023 highs only a contact under the psychological 138.00 stage. Successfully piloting above this hurdle might put into play the 140.00 area. In the occasion of a setback, preliminary help rests at 136.60, but when costs dip under this ground, a retest of 135.00 can’t be dominated out.

USD/JPY TECHNICAL CHART

USD/JPY Chart Created Using TradingView

S&P 500 FUTURES TECHNICAL ANALYSIS

The S&P 500 fell early final week, however encountered help at a rising trendline prolonged off the March lows. From these ranges, the index has made a strong comeback, with costs now testing main resistance close to 4,200, the place the bears have repeatedly overpowered the bulls since June of final yr, repelling the index decrease on practically each take a look at.

If historical past is a information, technical resistance at 4,200 could curb the tempo of current beneficial properties and extinguish constructive impetus once more, paving the best way for a reasonable pullback within the coming days. If the bearish state of affairs performs out, we might see a retrenchment towards dynamic help at 4,125 quickly forward of a potential retest of the 50-day easy shifting common at 4,060.

On the opposite hand, if the bulls handle to get the S&P 500 decisively above the 4,200 barrier, upward momentum might collect tempo, attracting new patrons into the market and creating the precise situations for a rally towards 4,310. This resistance corresponds to the 61.8% Fibonacci retracement of the 2022 selloff and final yr’s August excessive.

S&P 500 TECHNICAL CHART

S&P 500 Futures Chart Prepared Using TradingView