USD/JPY Awaits Topping Confirmation

by Admin

Awards 2013

USD/JPY 4H chart 2/26/2013 9:40PM EST


Topping: Looking at the 4H USD/JPY chart, we can say that the market has started to become choppy and consolidate since the start of February (although it did have a slightly bullish tilt). Before this week, February’s price range was 91.77 to 94.45. At the start of the week, we had a sudden upside push that immediately retreated from 94.54 in a dramatic plunge to break the range low of 91.77 in just one global trading session – an early topping price action. In the 4H chart, other than the 200-SMA, the other moving averages ( 100, 50, 22, 8 ) are getting into bearish alignment, while the RSI tagged 30. These are some early signs of topping as well.

Confirmation; support levels: The 4H chart also shows price action stalling around the broken but not cleared as well as the 200-SMA. As long as the market holds under 93.00 (given some elbow space because of the increased volatility), then the bearish outlook should remain from this topping attempt. The daily chart shows a near-term support/resistance pivot at 90.24. Breaking below this is likely also going to break below a rising trendline from November and offer further topping/bearish correction confirmation. Then the next levels of support are the 88.05 and the 87.78 pivots.

Also note that if the overall bullish momentum is to maintain after the current bearish correction, then support should be anticipated if the RSI is around 40, because below 40, we can assess the bullish momentum as lost.

USD/JPY Daily chart 2/26/2013 9:45PM EST