USD/JPY Testing Uptrend Resistance- Key NFP Levels
- USDJPY approaches resistance- pullback to offer long entries
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Broader Technical Outlook
USDJPY is approaching initial resistance after breaking out of the descending pitchfork formation off last month’s high. The resistance zone is defined by the 100% extension of the advance off the October low & the 76.4% retracement of the decline off the 2015 high at 123.42/54.
The immediate topside bias is at risk below this threshold with our bullish invalidation level set along a near-term median-line support structure (see below). A breach higher targets a more significant resistance confluence at 124.06/13 backed by the June 8th reversal-day close at 124.46.
Notes:The pair has been trading within the confines of a well-defined pitchfork formation off last week’s lows with the rally now extending into confluence resistance at the 88.6% retracement- 123.58. At risk for a pullback from these levels with a break below the median-line / 123.25 needed to invalidate the immediate topside bias. The broader trade remains constructive above 122.97 / channel support.
A breach of highs eyes initial targets at the November high at 123.75 and the 124.06/13 Fibonacci confluence region. Note that the momentum signature remains constructive and we’ll be looking for a pullback to offer favorable long entries / resistance triggers. A quarter of the daily average true range (ATR) yields profit targets of just 16-18pips per scalp, but expect this range to widen as we head into significant event risk later this week with ISM Non-Manufacturing, Factory Orders, Durable Goods Orders and Non-Farm Payrolls on tap over the next 48hours .
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Relevant Data Releases Next Week
Other Setups in Play:
- AUDJPY Rally Approaching Initial Resistance Hurdle
- AUD/NZD Pullback Testing Pivotal Support
- GBP/JPY Plummets Into Support- Sell Rips Sub 186
- Webinar: Dollar Crosses at Key Juncture Ahead of US Holiday
- EUR/CAD Rebound Eyes 1.4340 Hurdle
---Written by Michael Boutros, Currency Strategist with DailyFX
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