USD/JPY Challenges Key Trendline

by Admin

Awards 2013

USD/JPY 4H chart 4/1/2013 7:35AM EST

USDJPY

Anchored in correction channel: The USD/JPY has been falling in a corrective channel since hitting the 96.71 high on 3/12. Recently it has been focused more toward the fall support as it starts to build bearish momentum in the 4H chart, as reflected by the 4H RSI holding under 60 after tagging 30.  Price action to start the week fell to new lows for this corrective period and is challenging a major rising trendline that goes back to November 2012, which is when the uptrend took off from a period of consolidation.

There is a bit of demand early in the 4/1 US session. Will the 94.00 level become resistance? If so, the bearish correction is very likely. To the upside, it will probably take a break above 95.00 at this point to break above the correction channel and signal a bullish continuation.

The daily chart shows the rising trendline still intact though being challenged by today’s candle. It will have to at least stay below 94.00 to show intent in breaking the TL. If this is the case, then the near-term bearish target could be the 90.85 support pivot. Below that, USD/JPY further confirm the bearish correction scenario maybe toward some fibonacci retracements and previous support pivots.

USD/JPY Daily chart 4/1/2013 7:38AM EST

USDJPY