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- USD/JPY threatening to break a major upside pivot
- Convincing break opens the way for broader upside resumption
USD/JPY is facing important resistance. As we remarked in Wednesday’s Price & Time, the 99.45/65 area is a convergence of several key Gann levels including the 1x1 Gann angle line and the 4th square root progression of the year-to-date high in the rate. It is also worth mentioning that the 61.8% retracement of the May to June decline resides just above at 99.95. Anyone of these levels is potentially strong enough to repel the current move higher and with all three so closely together this area now becomes a clear upside pivot for the exchange rate. Should USD/JPY be able to close over this resistance area it will be a strong sign that the narrowing range consolidation that has dominated trading since late May is finally over and signal that the uptrend is finally re-asserting itself. Failure to overcome 99.95 by the end of the week, on the other hand, would mean that the consolidation in USD/JPY will likely persist for a while longer. We like positioning for a possible trend resumption with a buy stop on an hourly close over 99.95.
USD/JPY Daily Chart: September 4, 2013
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risks in Coming Sessions:
LEVELS TO WATCH
Resistance: 99.65 (Gann), 99.95 (Fibonacci)
Support: 99.15 (Tuesday’s low), 98.60 (Gann)
Strategy: Buy USD/JPY
Entry: Buy USD/JPY on an hourly close above 99.95
Stop: 1-day close below 99.15
Target: 101.50
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter at@KKerrFX.
