Forex Technical Update

Previous: USD/JPY Possibly Completed a Zig Zag Completion, 77.00 is Critical Pivot (9/11)



The 1H USD/JPY chart shows the pair breaking below a rising support from last week. Last week's spike and rejection to the from the upside reaffirms the 77.00 level as an important pivot. This week's price action started with a gap to the upside, which was immediately closed. Note that the RSI throughouto last week, and starting this week, has mostly stayed below 60, which reflects maintenance of the bearish momentum. Now, if the RSI breaks below 40, it suggests that the bears are in charge again. The 76.55 level is the near-term target, below which, 76.00 and the record low at 75.94 is targeted. The daily USD/JPY chart below shows a conservative swing projection towards 75.00 pending a strong close below 75.94. The upside risk is contained below 77.00, but a break above that puts the USD/JPY back to a range-bound market. A close above 77.86 then starts the prospect of a bottom in the short-term, which becomes a stronger case only with a close above 79.50.

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Fan Yang CMT
Chief Technical Strategist