USD/JPY Trading at Key Resistance Factors

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The USD/JPY has made a bearish run from 103 to 100.80, just above the 2014-low of 100.75. This swing puts the pair at the brink of opening up a bearish outlook.

Yesterday’s BoJ statement and FOMC meeting minutes are USD/JPY-bearish fundamental factors. However, the usd-jpy rallied to a new high on the week, around 101.70.

USDJPY 4H 
usdjpy 5/22

Here, the USD/JPY faces some resistance factors:
1) support/resistance pivot area.
2) 50-SMA in 4H chart.
3) 200-day SMA (in the daily chart below)
4) A falling trendline
5) Oscillators: Stochastic above 80, RSI around 60. In a bearish market, this combination of oscillator readings suggest the market is finished with a bullish cycle, and ready for a bearish one.

USDJPY Daily
usdjpy 5/22 daily chart

Bearish, 2014-lows
If USD/JPY fails to break above 101.75, and falls below 101.40, the focus is back to the 100.75-100.80 lows. It should be noted that a rising trendline from March 2013 and the 200-day SMA were broken last week. Traders are now testing the 200-day SMA as resistance. Holding south of 101.75 thus would really take away confidence from USD/JPY-bulls and transfer it to bears.

Bullish Continuation
A break above 100.80 first faces the 102 handle. Above 102, the bearish outlook is less likely, but a break above 103 and a falling trendline might be needed to reintroduce the bullish mode, that USD/JPY has been in since 2012.

In this scenario, the 104.10, then the 105.40 (2014-high) would be in sight.

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.