USD/JPY Trading at Channel Support

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USD/JPY Trading at Channel Support

As we start the 6/11 session, USD/JPY is trading at a rising channel support.

USD/JPY 4H Chart
usdjpy 4h chart 6/11

The rising channel has been forming since the market found support at 100.82, holding above the 2014-low of 100.76. If the market is to build bullish momentum, the rising support down to the 102 handle will be very important for the 6/11 session.

Bearish Scenario:
A break below the channel support at 102.20 is not necessarily a bearish signal. If it breaks below 102, it will clear the rising channel as well as the 200 and 100 moving averages in the 4H chart, which is a stronger bearish signal.

Below 102, the market opens up the 101.43 and 100.82 support pivots. The mode would remain consolidation mode, with a bearish bias toward the 100.76 low on the year.

Bullish Scenario:
On the other hand, ability to hold above 102 would maintain a bullish bias in the 4H chart, and the focus will remain on the 103 handle and resistance pivot. There is a falling trendline seen in the 4H chart coming down from the 102.79 high. A break above this line could signal a bullish outlook toward the 103 handle.

USD/JPY Daily Chart
usdjpy daily chart 6/11

The market is in consolidation mode, and the 103 area could be key resistance. It could be reinforced by a falling trendline if price gets there. A break above 103 thus opens up the 104.11 resistance pivot as well as the 2014-high at 105.44. This scenario also revives a bullish outlook from 2013, which means, the 105.44 might not be the 2014-high for long if price can push above 103.

Along with a push above 103, if the daily RSI also climbs above 60, it would reflect loss of bearish momentum. If the RSI pushes above 70, it reflects the revival of bullish momentum.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.