Short-term technical outlook on USD/JPY
Key technical elements
- The recent push up in price action from the 112.00 minor range support in place since 02 Jan 2018 has managed to stage bearish reversal right at the major descending trendline resistance acting as a resistance at 113.37.
- The daily RSI oscillator remains negative below its resistance at the 56% and still has further room to manoeuvre to the downside before it reaches its oversold region. These observations suggest that medium-term downside momentum of price action remains intact.
- Price action has staged a bearish breakdown from its minor range configuration support in place since 06 Dec 2017 now turns pull-back resistance at 112.00.
- The key short-term resistance stands at 112.50 which is derived from the former minor swing low areas of 04/09 Jan 2018, the minor descending trendline from 08 Jan 2018 high and close to the 50% Fibonacci retracement of the on-going decline from 08 Jan 2018 high minor swing high (see 1 hour chart)
- The significant short-term support rests at 111.00/110.80 which is defined by the 27 Nov 2017 swing low area and 1.382 Fibonacci projection of the decline from 12 Dec 2017 high to 15 Dec 2017 low projected from 08 Jan 2018 high.
Key levels (1 to 3 days)
Intermediate resistance: 112.00
Pivot (key resistance): 112.50
Supports: 111.40 & 111.00/110.80
Next resistances: 113.37 & 113.70
Therefore as long as the 112.50 short-term pivotal resistance is not surpassed, the USD/JPY is likely to face further downside pressure to retest the near-term supports of 111.40 follow by 111.00/110.80 next.
However, a clearance above 112.50 should invalidate the minor bearish breakout to see a squeeze back up towards the range resistance of 113.37.
Charts are from eSignal
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