Forex Technical Update
USD/JPY 1H Chart 11:30AM EDT 5/7
The USD/JPY fell after Friday's poor NFP. Both USD and JPY gained during the risk averse reaction, but since the factor is coming from the US, the Japanese Yen has an edge in this risk flow. The 1H chart shows the market consolidating before testing last week's low near 79.60. The consolidation and even a bit of rally is within the context of a newly developing downtrend at least in the short-term. The RSI has tagged 30, and if it can stay below 60 and tag 30 again, it would reflect a persistent and more mature trend downwards.
So, the key short-term resistance is going to be in the 80-80.15 area, while the RSI should stay below 60. However, a market that pushes above the newly projected channel resistance, especially before ability to push below 79.60, can be a sign of weak bearish intent, and call for further sideways to bullish price action with upside risk toward 81.00. Still, the bullish outlook will be within the scope of the drop since the 84.10 area in March. A break above 81.00 however can open up these March highs again.
For now, the outlook is still bearish. The short-term support area will be in the 79.50-79.60 area.
If the market breaks below the 79.50 level, the next key pivot will be around the 78.30-78.50 area.
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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