Forex Technical Update
Looking at the daily chart, USD/JPY has been trading in a range. Resistance has been at 78.25 and support at 76.55. A central pivot (though not exactly at the half-way point), could be seen at at about 77.33. Te daily chart shows that the market has been trading in the bottom half of the range since the start of the year. The market has respected the 76.55, and there is strong bullish daily candles in this bottom half of the range, suggesting an attempt to rise above it. Today, 1/20 and last trading session of the week, the market trades near this central pivot. A cross above 77.33, and also the 100 day simple moving average near 77.40, suggests an attempt toward 78.25. By that time the 200 day SMA would have caught up and provide resistance there again for a range-bound market.
The 4H chart shows that a rally above 77.40 would complete a double bottom. If the 4H RSI does push above 70, we can confirm that there is bullish momentum to go with the breakout. Again, the upside scenario is contained within the range in the daily chart, with the max target at 78.25. A break above 78.25 and the 200 day SMA would be a major bullish signal that USD/JPY is coming around to the bottoming process. In my opinion, it is still in a sideways market unless we can also push above 80.00, but a break above 78.25 range resistance will definitely be a major step in that direction.