Forex Technical Update
USD/JPY has maintained the bullish momentum in the short-term since establishing it last week. The 1H RSI reading has since remains above 40, and has been able to tag 70. Price is also trading above the 200 hour simple moving average. The upper bollinger band (here using 3 standard deviation from 200SMA), has been tagged, and is expanding, reflecting a widening of volatility to the upside as the market broke the 77.50 pivot, and then established it as support. Now as we we get deeper into the 11/28 US session, the market has also broken above the 78.00 handle and 50% retracement of the dip that followed the intervention pop (seen in the 4H chart).
The 4H chart also shows bullish momentum as the RSI pushes above 70. The next resistance can be anticipated at 78.40, 61.8% retracement. The 4H chart also shows the importance of 77.50. This can in fact be a base building pivot. In this scenario, the next high to test is near 79.50 and then 80.00. Clearing 80 is a significant bullish signal for the weeks and months to come as it suggests we have established a base for a 2012 rally.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.