USD/JPY 4H Chart 8:35AM EDT 8/9/2012
The USD/JPY continues to consolidate. The high put in this week is still the high, at 78.78. The lows continue to respect a rising trendline going back to the 8/1 low near 77.90. The RSI in the 4H chart is stuck between 40 and 60. Besides the 200-4H SMA, the 100, 55, 21, and 8 period SMAs are all bunched together reflecting momentum of a congestion.
It should be noted that during this sideways market, there is a bit of residual bearish bias as the momentum and price action before this consolidation was bearish. A break below 77.90 exposes lower support pivots ie. 77.63, 76.55.
A push above 78.78 should immediately test a declining trendline that goes back to 3/21 this year. Clearing 79.00 handle then should suggest a bottom and at least some corrective rally in the short to medium term (rest of August?). This scenario builds up if the RSI pushes to 70 in this 4H time-frame, and if price can hold off a throwback above the middle of the current range.
USD/JPY Daily Chart 8:35AM EDT 8/9/2012
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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