Forex Technical Update

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USD/JPY Daily Chart 11/26/2012 11:35AM EST

USD/JPY 11/26/2012 daily chart

Bullish market: The USD/JPY has made some key bullish developments recently and has rallied in a very sharp manner since finding support above the 77.00 clip in September. The RSI in the daily chart shows persistent bullish momentum developing. As USD/JPY got to 82.80, the market stalled, and the pair has been consolidating the past 3 sessions (including today – 11/26) trading near the 82.00 handle during the 11/26 US session. 

Consolidation length: Since the rally from the 77.12 low to the recent 82.83 high, there was 2 consolidation, or choppy periods, the first of which, was from 9/13 to 10/11 (4 weeks), and the second one from 10/22 to 11/14 (3 weeks). So, if 82.83 is going to hold for another consolidation period, be prepared if it does consolidate the rest of the year.

Retracement targets: The first key fibonacci retracement target at 38.2% is coincident with a previous resistance pivot.Therefore, the 80.60-80.70 area is the the first area to monitor/target, while stalking USD/JPY’s consolidation. 50% near 80.00 is also a valid retracement target. An aggressive target would be the 61.8% retracement at 79.30, but a push below that, and below 79.00 makes the bullish outlook in the longer-term unclear. Staying above 80.00 on the otherhand adds to the clues of a long-term bullish market in development, at least with the 2012 high at 84.19 in sight.

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.

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.

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