USD/JPY Responds to Near Term Fibonacci Support
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-Last Wednesday, USDJPY held a trendline confluence from the lines that extend off of the August lows and former resistance line off of the May and July highs. The quick reversal bodes well for bulls.
-Thursday’s USDJPY decline was accompanied by strong volume (95th percentile measured over 20 days for CME volume).
-21, 63, and 126 (1, 3 and 6 month) averages are bunched together. This condition indicates a ‘coiled’ market often seen prior to trend moves.
-A complex inverse head and shoulders may be underway, which portends a significant advance (if confirmed on a breakout).
Trading Strategy: Long a bit against 97.75. The 61.8% retracement of the rally from last week’s low held as support on Tuesday.
LEVELS: 97.75 98.16 98.48 | 99.35 99.89 100.60
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