USD/JPY (daily chart) dropped from 100.86 on July 19 and formed a doji candlestick pattern. If we draw a line connecting the May 22 high and the July 8 high, we get a downtrend line. On the daily chart, that doji occurred right at the line. This is an example of an Eastern candlestick pattern meeting a Western technical signal, indicating a warning of a possible turning point, at least for the short term. In addition, the candlesticks of July 18, July 19, and July 22 formed an “evening doji star” variation – another warning sign.
The pair needs to break above the mentioned downtrend line to invalidate those warning signs, and it needs to clear the key 101.50 level to resume its uptrend move. If price respects the downtrend line, the pair could seek support at the following levels:
1st support: 99.00 (the July 17 low or 4-hour EMA 200)
2nd support: 98.30 (around the July 11 low)
3rd support: 97.60 (50% Fib retracement)
4th support: 96.70 (61.8% Fib retracement and the March 12 high, also close to the May 1 and June 25 low of 97.00)
No comments:
Post a Comment