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USD/JPY Technical Analysis: Break of 2015 Uptrend at Hand?

USD/JPY Technical Analysis: Break of 2015 Uptrend at Hand?

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • USD/JPY Technical Strategy: Flat
  • Support: 122.84, 122.26, 121.55
  • Resistance: 123.41, 124.12, 124.56

The US Dollar remains under heavy selling pressure against the Japanese Yen as prices threaten a breach of rising trend line support in play since mid-January. In fact, the pair is now within striking distance of testing July’s swing bottom below the 121.00 figure.

A daily close below the 76.4% Fibonacci expansion at 121.11 exposes the 100% level at 119.83. Alternatively, a bounce back above the 61.8% Fib at 121.91 opens the door for a challenge of the 50% retracement at 122.55.

While the trend line breach seems likely considering the depth of prices’ penetration below support, strict confirmation remains absent. Furthermore, a break that puts the pair above the 76.4% Fib or in particularly close proximity to the July low runs the risk of skewing risk/reward considerations against entering short. On balance, we will opt to stand aside for now and monitor the down move’s evolution before committing to a trade.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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