USD/JPY 4H Chart 10:10PM EDT 8/5/2012
The USD/JPY was pushing to a new high for the week last Friday after the better-than-expected Non-Farm Payroll data. However, the rally retreated after briefing cracking the recent range high as well as a declining channel resistance trendline, going back to the June-high at about 80.60. In the 4H chart, the market barely closed above the 78.70 resistance pivot before showing respect to this resistance cluster.
The RSI reading in the 4H chart also suggests that the bearish momentum from the recent downtrend from June is still intact, as it was not able to push through 60. The RSI reading has been under 60 since 6/25 and has tagged 30 multiple times, reflecting persistent bearish momentum.
Finally, the structure of the correction since July 23 MAY be complete since it can be categorized as a double 3 (XYZ), where all the waves have abc (3-wave) fractal structures.
As we consider this bearish scenario, it should be noted that the upside risk for further consolidation/correction can be around 79.00 or where price meets the projected declining trendline going back to the 2012-high at about 84.20, established in March.
USD/JPY Daily Chart 10:15PM EDT 8/5/2012
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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