Forex: USD/JPY moves above descending trend line; hits 87.50

FXstreet.com (San Francisco) - The USDJPY rally appears to have found a short-term roof at 87.50 from earlier session lows near 86.81, and, at the time of writing, has peaked at 87.53 intraday, last quoted at 87.45. Price appears to have punched through a descending trendline around 87.30 (drawn from 88.10 to 87.79) in the past hour or so. The hourly and 4-hour timeframes depict an RSI still in neutral territory, at 54 and 52, respectively, suggesting there may be room for further bullish activity.

Eamonn Sheridan, editor at Forex Live explains what has been driving this recent price action: "There has been EURJPY buying in the market (I've heard Asian central banks prominent in the buying - make of that what you will) helping to lift USDJPY."

Mr. Sheridan continues: "I also think the market has been quick to want to short USDJPY, looking for some deeper retracement of the big run up over the Christmas/New Year period - so there has been forced short-covering on this move higher in USDJPY this morning too."