Forex Technical Update

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USD/JPY 1H Chart 8:50AM EDT 8/28/2012

"USD/JPY

The 1H USD/JPY chart shows a market that has been consolidating since it fell after the FOMC meeting minutes showed more urgency to consider QE3, which slapped the USD across the board. In the previous USD/JPY update, I noted that it was holding above a rising trendline, which has held price action throughout August (seen more clearly in the 4H chart).

The US Dollar - Japanese Yen pair consolidated into a flag pattern above this rising trendline.Then the 8/28 Asian session saw a slide and breakout below this flag pattern. As we start 8/28 US trading, we observe a pullback, and a rejection - price action that confirms the breakout and exposes the bearish outlook in the short-term.

We do still need to clear the rising August trendline, which should be seen with a clear below 78.50. This opens up a pivot at 78.14, and then 77.90, which is the August low, made on August 1. Below that the 77.62 support pivot from June 1 is a key level.

USD/JPY 4H Chart 8:50AM EDT 8/28/2012

"USD/JPY

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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