bio2

Short-Term Forex Technical Outlook: USD/JPY (Update)

Wednesday, 07 January 2009 11:19:00 GMT  |  David Song, Currency Analyst

U.S. dollar strength pushed the USDJPY higher this week, but as investors remain risk adverse, the technical forecast favors a bearish outlook for the pair.

Currency Pair: USD/JPY
Chart: 60 Min Charts
Short-Term Bias: Bearish

Analysis Update

Broad based selling of the U.S. dollar dragged the pair lower during the overnight session, and the pair is expected to weaken further as the bearish trend remains in tact. Over the remainder of the session, I anticipate the pair to work its way towards the 38.2% Fib retracement level, and a break below 92.00-20 could drag the pair towards the 12/29 low of 89.75 over the following week. Meanwhile, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.

Analysis

U.S. dollar strength pushed the USDJPY higher this week, but as investors remain risk adverse, the technical forecast favors a bearish outlook for the pair. After peaking to a high of 100.58 on 11/4, the dollar-yen slipped to a low of 87.14 on 12/17, but the sharp retracement from the December low triggered an oversold RSI signal. Over the remainder of the week, I expect the pair to hold its bearish trend, and we may see the pair work its way down towards 92.00-20 (38.2% Fib) over the remainder of the week to fill in the gap from the 120 SMA. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

To contact the author of this article, please email: dsong@fxcm.com

    Related Articles:

A Clear Channel And Immunity To Risk Trends Stabilizes AUDCAD Range

Euro Crosses: Corrective Rallies Will Offer Bearish Trades

Euro Expected to Form a Low Soon; British Pound Breakout Trade

Resources

• free demo account
• forex courses
• open an account
• forex stream
• free webinars