Forex Technical Update
USD/JPY4H Chart 5/15/2012 10.29AM EDT
USD/JPY's inverted head and shoulders attempt to start the 5/14 trading week did not work out. However the subsequent drop basically respected the shoulder level near 79.70. Into the 5/15 US trading session, the USD/JPY is pushing above 80.00 again. The inverted head and shoulders pattern is still valid, but this time with 2 shoulders on each side.
Looking at the 1H chart, the 80.55 resistance area is in sight again. Above that, the 81-81.20 area should be monitored for selling again.
I still think there is downside risk toward 78.30-78.50 area, but if 80.00 and then 80.50 levels hold as support, we can see a significant corrective rally and the market might be sideways instead of bearish. A more significant corrective rally can send the market toward 82.00, and if the market is sideways to bullish, instead of sideways to bearish, the 84.00 high is in sight as well. But first we have to establish support at 80.00 to building from a bottoming pattern.
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.
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