Forex Technical Update
The previous update on USD/JPY theorized that if the market stayed above 80.80 - near 61.8% retracement of the initial and failed attempt to break a downwards channel resistance - then we are more likely to be in a bullish development then a flat market development. Price action seeing a higher high and higher low also suggests a bullish development.
As we start the 4/24 Asian trading session, the USD/JPY continues to rally from the 80.80 area and at 81.50 is attacking the declining channel resistance again. The RSI is at 60, and a push above confirms the nascent bullish bias. A swing projection targets 82.25, but we should also monitor the 81.85 pivot as well as the 82.00 handle.
Failure to break above 81.85, and a return below 80.80 will return the mode back to flat-to-bearish.
If the market does push to 82.25, we might get an initial bearish reaction there because it would have been a gartley pattern. However, there is still upside risk toward highs near 84.16, especially if the daily RSI pushes above 60. After pushing above 70, then failing to sustain a break below 40, a return above 60 reflects bullish continuation momentum.
The Bank of Japan meets on Thursday 4/26 in US, but sometime in the 4/27 Asian session. We got some chatter of the BoJ Anteing Up on Stimulus, and we have since saw the JPY pressured. So we are entering this risk event with so far some expectations, and makes this a very likely market mover, so be careful not to be too committed in position size for any USD/JPY exposure and your overall JPY-exposure for that matter.
Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.