Forex Technical Update
Last week, the USD/JPY failed to break above 77.32 range resistance and fell to about 61.8% retracement before finding support. The RSI was held above 50 and shows a possible bullish momentum development then. After starting the week quietly, the market rallied sharply during the 1/24 Asian-European session and broke the 77.32 range resistance heading into the US session. This also crosses the 200 4H simple moving average and pushes the RSI reading above 70. A breakout target, taking the width of the range projected into the direction of the breakout is near 78.00.
The daily chart shows that a break above 77.32 is actually a break above the central pivot of a larger range. With the strength seen in the breakout in the 4H chart, we can expect the market to push toward the 78.25 range resistance. While the market continues to be a sideways market, a break above 78.25 could start an interesting step if it also breaks above the 200 day SMA, and push the daily RSI above 70. These can be early steps to developing a long-term bottom. We would also need to break above 79.50 pivot to confirm.