Forex »USD / JPY hits resistance at 5-year high

USD / JPY is hitting resistance after hitting a five-year high!

Volatility slowed considerably in forex for the USD / JPY on Thursday, giving charts an “inside day” pattern (the high is below the previous high and the low is above the previous low – not to be confused with a “bearish” harami. ”) Together with the Relative Strength Index (RSI) which records overbought conditions. Although a day inland suggests a bearish turn, further studies on the daily time horizon show that it is possible to reach as far north as 120.11. In the past few days, our research team highlighted that the price has broken the upper limit of an ascending triangle formation (Quasimodo resistance at 116.33). The reversal from 116.33 allows analysts to plot a profit target of the pattern by extending the “base” distance (blue vertical box) from the breakout at 120.11.

The latest technical developments reveal that the price has shook hands with the weekly resistance from 118.64, closely overshadowed by a 1.618% Fibonacci extension at 119.77 and the resistance of the channel, attracted by the high of 110. .97. Despite the resistance tests found, it is important to remain aware of where we are relative to the trending studies.

The overall long-term forex trend for USD / JPY has been up since 2012 (check the monthly time frame). The 21.5% correction from June 2015 to June 2016 provided a buying opportunity, as well as a subsequent 14.8% correction from December 2016 to the pandemic lows formed in early March 2020. Overall, the trend primary is higher, with the secondary trend favoring further progress.

The key resistance at 119.29-118.80 in the H4 time frame continues to be a talking point, repelling price action in recent trade. A sharp downward swing in this time frame that clears the low of 117.70 could trigger a run up to the aforementioned daily support at 116.33. The 119 level of the H1 period is housed in the main resistance of the H4 period. A break of 118.50 on H1 puts the technical spotlight on 118 and channels extended resistance support from the high of 115.79.

Perspective techniques

The emerging weekly resistance at 118.64 could discourage further upside and push the H1 price below 118.50 towards 118. Overall, however, given the current uptrend and daily time horizon that demonstrate the possibility of reaching the ascending triangle profit target of 120.11, buyers are likely to remain in control, despite a short-term decline. With that, 118 could be seen as a support to buy a pickup.

Par Aaron Hill, FP Markets

After earning his bachelor’s degree in English and Creative Writing in the UK and then spending a few years teaching English as a foreign language teacher in Asia, Aaron was introduced to financial trading, particularly forex, where he is over ten years old. Since then, Aaron has caught the trading bug and amassed substantial knowledge, earning CMT (Chartered Market Technician) level 1 and 2. He has since received the CFTe (Certified Financial Technician) and believes there are no limits when it comes to trading. knowledge.

The views expressed herein are those of the author only and do not necessarily reflect the views of Forex Quebec. Every investment and trading move carries risk, you should do your research when making a decision.

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Disclaimer: The information and opinions contained in this report are provided for general information purposes only and do not constitute an offer or solicitation to buy or sell foreign exchange contracts or CFDs. Although the information contained herein comes from sources believed to be reliable, the author does not guarantee its accuracy or completeness and assumes no responsibility for any direct, indirect or consequential damages that may arise from anyone who relies on such information.

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