USD/JPY Price Outlook: Yen Decision Time As Rally Tests Yearly Highs

The Japanese Yen has continued to trade within the confines of an ascending pitchfork formation extending off the yearly lows with price now approaching resistance just ahead of the median-line/yearly highs. Here are the updated targets and invalidation levels that matter on the USD/JPY charts heading into the start close of September trade. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

USD/JPY DAILY PRICE CHART

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USD/JPY Price Chart - Daily

Technical Outlook: In my most recent Weekly Perspective on the USD/JPY, we highlighted a key resistance zone at 112.65-113.27– a region, “defined by the 2018 open, the 200-week moving average and the 61.8% retracement of the 2017 decline. Note that this zone stands just pips from the objective yearly opening-range highs at 113.38.” Price is trading in this region today ahead of the monthly close.

The immediate focus is on key daily resistance at 113.08/27 where the yearly high-day close converges on the 61.8% retracement- a breach / close above this threshold is needed to keep the long-bias in play targeting the November high-day close at 113.70. Daily support now rests at 112.65 and weakness below this level would risk a larger correction in price.

USD/JPY 240MIN PRICE CHART

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USD/JPY Price Chart - 240min

Notes: A closer look at price action shows USD/JPY trading within a near-term channel formation extending off the monthly lows, further highlighting support at 112.65. Near-term bullish invalidation stands with the weekly open / opening-range lows at 112.40/43. A break below this level would risk a larger correction with such a scenario targeting 112.15 backed by 111.75 and 111.43 – both levels of interest for possible exhaustion / long-entries IF reached. A topside breach of this resistance zone targets the median-line backed by the November high-day close / 1.618% extension at 113.70.

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