USD/JPY Daily Chart
Technical Outlook: USD/JPY has broadly held within the confines of this ascending pitchfork formation extending off the yearly lows. Note that a parallel of the same slope (red) extending off the October lows is now coming into view. Key resistance for the pair stands with the range highs / 61.8% retracement at 114.30/36 with support steady at 111.65 where the October low converges on the 100 & 200-day moving averages. Broader bullish invalidation rests at 111.03.
USD/JPY 120min Chart
Notes: A closer look at price action highlights a near-term ascending channel formation extending off the lows with the upper parallel converging on the 78.6% retracement at 113.90 into the close of US trade today. Interim support rests at 113.25 with our near-term bullish invalidation level now raised to 112.48.
A breach higher targets the 114.30/50 range- a critical threshold which if compromised would open up an advance targeting the 61.8% retracement of the 2015 decline at 115.52. Bottom line: heading into the FOMC policy meeting tomorrow, the near-term uptrend is at risk while below 114.50. Look for either signs of exhaustion there, or a break below 112.48 to shift the focus lower. A close above would keep the long-bias in play targeting subsequent resistance objectives.
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