Forex
USD/JPY Hammer Teases Rebound from Seven-Month Low
The USD/JPY pair rebounded from its seven-month low on Wednesday, forming a hammer pattern that could signal a potential reversal. The pair had fallen over 650 pips since September 2, reaching a low of 152.89 before recovering to around 153.75.
The hammer formation is typically bullish, but a daily close above the high of the day (HOD) of 154.42 is needed for confirmation. If achieved, the next target would be 155.00, followed by the 200-day Simple Moving Average (SMA) at 158.45 and then 160.00.
The Relative Strength Index (RSI) is oversold, but given the velocity of the move, USD/JPY could fall further. However, if the RSI pierces above the 30 level, the pair could regain some ground.