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Previous: USD/JPY - Key Levels in the Short-term (5/7)

USD/JPY daily chart 5/8/2012 7:24AM EDT

USD/JPY

The USD/JPY continues to be bearish and is now cracking the 79.50 pivot. This was a resistance pivot on Oct. 31, 2011, and not really a support factor other than that. Instead, the 79.12, 61.8% retracement level might provide some support. However, the next key level of support is near 78.30. Here, we have the 200-day simple moving average as well as the resistance level for a consolidation from Nov. 2011 through Jan. 2012.

From this support cluster, we can look for a bounce. However, in considering of the declining channel seen in the daily chart, the bullish outlook should probably be limited first to the 80.00. Then a breakout opens up at most 81.00, and only with further confirmation above should we consider a return toward the highs just above 84.00.

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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.