Forex Technical Update July 22, 2010 USD/JPY in Pullback After Breakout
- 4H and 1H: Yesterday, the anticipation of a rally within a rising channel was incorrect. Instead, the market broke below the rising channel.
- I mentioned in the Chartist Corner session that a break below the previous low at 86.90 would invalidate the near-term bullish outlook.
- The scenario is different now. The market has completed a corrective pattern, and may be heading lower.
- First it is testing the previous low near 86.40.
- A break below this suggests a decline further towards 85.30 area, noted in the previous weekly update.
- However, I can still see the market continuing in consolidation mode between 87.50 ad 86.40. There may be a flat forming, which means a rally attempt towards the resistance near 87.50.
- However, the market is bearish, so the break below 86.40 has more significant implications, then for example if the market broke above 87.50.
Fan Yang Currency Analyst Commodity Trading Advisor
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