Short-term technical outlook on USD/JPY
Key technical elements
- Since the start of 2017, the USD/JPY has continued to evolve within a range configuration with its resistance at 115.00 and support at 108.15 (see daily chart).
- In the short-term, the pair is trading within a bearish descending channel in place since 11 July 2017 high (see 1 hour chart).
- The significant key short-term resistance now stands at 110.10 which is defined by the upper boundary of the aforementioned short-term descending channel, the upper boundary of “bearish flag” continuation chart pattern in place since 18 Aug 2017 minor swing low and a Fibonacci cluster.
- The daily RSI oscillator remains below its corresponding pull-back resistance at the 52% level. This observation suggests that there is still a lack of medium-term upside momentum in price action.
- The next significant short-term support rests at 108.30/15 zone which is defined by the 17 April 2017swing low area.
Key levels (1 to 3 days)
Intermediate resistance: 109.80
Pivot (key resistance): 110.10
Supports: 108.90, 108.65 & 108.30/15
Next resistance: 111.00
The aforementioned short-term negative technical elements may trigger a bearish breakdown on the USD/JPY from its minor ascending range (bearish flag) configuration in place since last Friday, 18 August swing low area of 108.65. As long as the 110.10 key short-term pivotal resistance is not surpassed and a break below 108.90 (lower limit of the bearish flag) is likely to open up scope for a further potential drop to retest 108.65 before targeting the next support at 108.30/15 next.
However, a clearance above 111.10 should invalidate the preferred bearish bias to see an extension of the corrective rebound from 18 August 2017 low to test the 111.00 key medium-term resistance next.
Charts are from eSignal
The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. City Index recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com.au, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. GAIN Capital Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.