The USD/JPY pair barely missed the 2014-low last week at 100.75. It has bounced off that low for the past few sessions, and is now trading just under 102.00, which is just below some key factors.
The daily chart shows a couple of resistance factors here:
1) A falling resistance that connects the 104.11 and 103 resistance pivots (refer to 4H chart)
2) A rising trendline that comes up from February 2013. (refer to daily chart)
3) The 100-day and 50-day SMA is in the 102.25-102.50 level.
Bearish correction – ABC?
If the market is turning from neutral to bearish, traders should be monitoring the 102 level for resistance. If 102 holds, look for a retest of the 100.75 low.
A bearish correction scenario is that USD/JPY is in an ABC correction against the prevailing bullish trend. This points at least toward the 100.00 psychological handle.
In the 4H chart, you can see additional resistance factors even at 102, where we have the 200-hous SMA. If the USD/JPY falls back below 101.30, the focus will be back to the 101.75, 2014 low, and our ABC Bearish correction scenario is in play.
If 102.50 Fails:
A break above 102.50 however shelves this bearish correction scenario for a more sideways consolidation. A break above 103 will still be needed before re-introducing the bullish outlook toward 104.11 and the 2014-high at 105.44.
Earlier: EUR/USD Completes a Double Bottom
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