USD/JPY 4H Chart 10:15PM 10/25/2012
Broken trendline: The USD/JPY retreated after breaking above the 80.00 handle, short of the previously noted 80.60 resistance pivot. Inability to hold above 80.00 lead to a fall toward 79.50 during the 10/26 session as we can see in the 4H chart. This move broke below a rising trendline from just below the 78.00 handle from 10/11. The RSI in the 4H chart is at 40. Clearing below this shows lost of bullish momentum in this time-frame.
Retracement targets: Looking at the 4H chart, we see that 38.2% retracement of the rally we had through October so far is at 79.25, a possible near-term support/target. A slightly more aggressive retracement would be 50% in the 78.90-79.00 area.
Big picture: In the big picture, USD/JPY has been trying to come off a bottom from historic lows. It has been choppy and it can stay like that for quite a while. So in the short-term expect sudden sharp retracements, but I am confident in the lows from last year to hold. I am looking for deep retracements to add long positions.
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.
Information 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.
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