Forex Technical Update
USD/JPY 4H chart 11:15AM EST 1/24/2013
Dips: USD/JPY has had some dips recently, but still maintains the bullish stance. Looking at the 4H chart we see that since the new year, there has been increasingly stronger dips, 158 pips, 212 pips, and most recently 218 pips. However, they all avoided the previous lows, while following up with higher highs eventually breaking above the 90 handle.
Momentum: The 4H RSI has showing lower tops but still has tagged 70. Also it has stayed mostly above 40, except for the last time where it cracked. This development shows still persistent bullish momentum, although it may have started to lose steam.
Bullish scenario: If the market breaks above 90.20, it continues the bullish outlook, though we should monitor the RSI to see if it will miss 70 or revive momentum if it breaks above 70. There is some more room to the upside until the next major resistance. USD/JPY has already broken above 2012 and 2011 highs, and the 2010 high awaits at about 94.85. Can it get there with no major correction, or is the recently increasing dips a sign of a real correction ahead?
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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