Talking Points
- USD/JPY holds key moving average
- Still needs to surpass 2014 closing high
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
USD/JPY looks to be at an interesting technical juncture. After punching through 122.00 to record its highest level in 7 years earlier in the month the exchange rate reversed course leading to a fairly aggressive selloff on Wednesday after the FOMC down towards the widely watched 50-day moving average around 119.30. The successful hold of the key support level maintains the broader positive technical tone in the pair and alleviates some of our concerns about a budding double top. That said, we still need to see a close above 122.43 as the exchange rate has still not surpassed the closing high recorded in early December. A close north of this level would help confirm that a more important leg higher is finally underway in USD/JPY. Any weakness back under 119.30 would undermine the positive technical tone in the rate and set the stage for a more serious decline.
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USD/JPY Daily Chart: March 20, 2015
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in the Week Ahead:
LEVELS TO WATCH
Resistance: 121.43 (2014 closing high), 122.01 (YTD high)
Support: 120.10 (Gann), 119.30 (50-day MA)
Strategy: Buy USD/JPY
Entry: Buy USD/JPY at 120.10
Stop: Daily close below 119.30
Target: 122.00
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter at@KKerrFX.
