Forex Technical Update
After a quick head fake to the upside, the USD/JPY fell to record lows last Friday, scraping 75.80 before a pullback. The bounce after the dip found resistance at 76.48, which was seen as a level of support for much of October. This support goes up to 76.65. Note that this resistance zone is coincident with the 50-61.8% retracement level of the swing that started from the 77.08 head fake high to the 75.80 record low. Also note that the RSI reading in the 4H chart established bearish momentum last Friday after the dip, and continues to show pressure as it returns to 30.
The daily chart shows the market breaking to the downside of a range that started in August. If the 76.50-76.65 area holds as resistance the market has a good chance to continue lower. A range breakout targets the 74.75 level, with 75 as a probable psychological support.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.