Previous: USD/JPY Continues Channeling Up; Cracking 2012 Trendline (8/14)

USD/JPY 4H Chart 1:16PM EDT 8/16/2012

The USD/JPY has been gaining some momentum after a choppy consolidation mode from July 19 through August 13. In the last update, we noted that price action on August 14 challenging not only the recent consolidation resistance near 78.80, but also a declining trendline that goes back to the 2012 highs made in March, as seen in the daily chart.

The 4H RSI pushed above 60 showing loss of previous bearish momentum. The ability to tag 70 introduces bullish momentum. If we get a pullback, the RSI should remain above 40, preferably above 50 to show maintenance of bullish momentum. Price action should also remain above 78.80 for a clear sign of bullish takeover in the short-term.

This short-term bullish outlook has a target of 80.60. Here we have a resistance pivot made in June and earlier in May. However, a break back below 78.50 makes things very unclear.

USD/JPY Daily Chart 1:25PM EDT 8/16/2012

Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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