Forex Technical Update
The USD/JPY was held below 82.50 heading into the NFP Friday. The 1H chart shows that this was in confluence with a declining trendline, 200 simple moving average, and a reading for 60 for the RSI. Staying below this level shows maintenance of the bearish outlook in the short-term.
The NFP missed forecast of 209K badly, with a reading of 120K. USD and JPY both gain from risk aversion, but this adds a conflicting factor for the USD in that it brings up more chance of stimulus which would pressure the USD. That is the reasoning for the sharp bearish reaction seen in the USD/JPY.
The daily chart shows the market correcting since 84.16 after an essentially uninterrupted rally from 76.03. Where might we find support?
The 81.00 psychological pivot and 38.2% retracement offers the first possibility.
Then the 80.50 level was a support pivot seen in early March which was established after after 2 down days, and sent the market up to the 84.16 high.
The 80.00 level is a major psychological support as well as 50% retracement. This will be a key level to hold for the bullish outlook to continue.
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.