Forex Technical Update July 8, 2010 USD/JPY Tests First Resistance After Bottoming at 87
- Daily: The USD/JPY has been very weak, but seems to have found a bottom at 87. After several failed daily attempts at breaking below this level, the market started to rally during yesterday's US session.
- The market is now near 88.50. The first level of possible resistance is at 89.30. However a cluster of resistance resides at the 90 level. This is a declining trendline, and convergence of 50 and 200 period simple moving averages. It is also between 50% and 62% retracement.
- The momentum is swinging sharply out of the oversold area. The market is overall bearish, with 2010 turning the market sideways. Therefore, I would suspect topping action as the market approaches these resistance levels between 90 and 90.50.
- Just because this market is in a range, it does not mean it will travel from support to resistance at 95. It is more likely a market is reverting to the central balance of the range near 90. An aggressive target may be 92, which has been an important powerline since July 2009.
Fan Yang Currency Analyst Commodity Trading Advisor
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