USDJPY: Loss Of The 92.32 Level Exposes Channel Top

USDJPY - The pair has increased the risk of further strength towards its weekly channel top currently located at 93.36 having decisively broken and closed above the 92.31 level, its Oct 27'09 high. Although its immediate risk remains to the upside following its recovery triggered off the 84.80 level, its 2009 low, USDJPY still retains its overall downside weakness started at the 101.43 level in early April'09. Another evidence supporting this view is its established falling channel which has been in place since the mentioned top in April'09. The main risk to our upside view will be a firm break and hold above its falling channel halting its medium term downside and triggering further price acceleration towards its .50 Fibonacci Retracement(101.43-84.80)/Aug 24'09 high at 95.05/01 with a break turning focus to its Aug 07'09 high at 97.77. Its weekly RSI remains bullish and pointing higher suggesting further strength. On the other hand, corrective pullback if seen will put the next downside target at its resistance turned support at the 92.31 level, its Oct 27'09 high ahead of the 91.86 level, its Dec 22'09 high and then its Dec 04'09 high at 90.77 where we expect a reversal of roles to occur and turn the pair back up again. Further down, the 88.30 level, its Dec 14'09 low and the 87.35/10 levels come as the next supports if the 90.77 level snaps. On the whole, with corrective strength activated off the 84.80 level continuing to be seen, USDJPY now eyes the 93.36 level or even higher.

Weekly Chart: USDJPY


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