USD/JPY 1H chart 1/28/2013 10:45PM EST
Correction: USD/JPY has continued to rally swinging above 91.00 end last week, and starting this week with a new high for the year, a weekly occurrence now. However, right after the new high, we have had 2 sessions of correction, which is shaping out to be a flag pattern. As we get into the 1/29 Asian session, USD/JPY appears to have maintained overall bullish momentum established since last week’s swing, as the 1H RSI held above 40.
Bullish continuation scenario: If the 1H RSI can now push back above 60, it would show revival of bullish momentum. As I write this sentence, the USD/JPy has pushed a little further above the flag pattern, showing an early sign of a bullish continuation. If there is a bullish continuation, price will need to push above 91.25 and the 1H RSI would have to at least tag 70.
Consolidation scenario: Inability to push through 91.25 would mean the market is still consolidating with room for a correct. The 4H chart shows the corrections we had the last 3 swings up.
The question is therefore weather the USD/JPY will continue to be choppy and show another deep corrective swing in the 4H time-frame? Or has the USD/JPY picked up steam again after a choppy January. It should be noted that even though it was a choppy January, the 4H RSI held above 40 except for a slight breach, and has tagged 70 several times, reflecting persistent bullish momentum.
USD/JPY 4H chart 1/28/2013 10:45PM EST
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.