Forex Technical Update

Previous: USD/JPY Holds Below 82.50 and Slides Sharply After Poor NFP (4/6)

USD/JPY

USD/JPY

The USD/JPY continues to slide, extending the bearish tone struck after the poor NFP data on 4/6. The 4H chart shows the market trading in a declining channel and the USD/JPY pushes below 81.00 (which was where the 38.2% retracement of the 76.03-84.16 swing resided). Looking at the channel we also see that we are trading at the area of channel support.

The daily chart shows that we are getting to an area of important support, from the price perspective and also from the momentum perspective. The momentum of the rally since 76.03 is being threatened as the daily RSI reading approaches 40. With the RSI above 40, we can say the bullish momentum is still maintained. However, a break below shows that we are breaking the uptrend, and entering in sideways if not bearish market.

USD/JPY

Before getting into the bearish market scenario, there are a couple of support factors, other than the channel support. 80.53 is a support pivot, and the 80.09 level is the 50% retracement with another support  pivot at the <>0.00<>handle as well. If the market holds below 81.00 in the short-term, <>0.00-80.50 <>s the area to monitor for renewed buying.<><<>>he fundamental advantage JPY has over the USD at the moment is that the US is pressured here because of the poor NFP even though Bernanke has not outright said stimulus is needed. The BoJ also did not mention stimulus, and with China's growth peaking, JPY might gain due to its safe-haven status in the Asian region. Thus, bullish outlooks from the support factors mentioned should be limited until this bias shifts (better jobs data from US, mention of stimulus from BoJ etc.). For now <>1.80-82.00<>is an important resistance area that will challenge the bullish outlook.<><<>>oin the << href=../technical-updates/technical-updates/technical-updates/live-events/>>arket Intelligence Briefings<>to get fundamental analysis, technical setups, trade plan assessments for USD/JPY, and other currency pairs.<><<>>>an Yang CMT is the <>hief Technical Strategist<> trader, educator and a of the main contributors to FXTimes - provider of F>ex News, Analysis, Education, Videos, Chartsnd other trading resources.>ormation 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.