- Daily: The USD/JPY is confirming yesterday’s bullish reversal signal in both daily and 4H time-frame. the stochastic is slightly more bullish, and the 90.40 area can now be established as a support at least in the short-term. (Refer to Daily Video Technical Update 1.19.2010 2nd pair).
- 4H: Looking at the 4H time-frame, you can see that the rally attempt had some trouble in the beginning of the European session, topping off at 91.40 and declining to the 90.80 area, which tested the 200MA. This held, and a continuation is signaled with a strong bullish candle to begin the US session.
- The rally in the short-term may see resistance at the 91.80 area, which would complete an “abcd” retracement pattern. Note: The 50% retracement level is at 92.00 and 61.8% is near 92.50. These are all viable retracement resistance areas in the short-term.
- The important thing is to see what kind of decline results from these resistance levels. If it is not aggressive and bottoms above 91.00 area, we may be at the start of a continuation rally.
- Daily: If the decline continues, look for bottoming action at around 88.50 (78.6% retracement)
Fan Yang
Currency Analyst
Commodity Trading Advisor
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