USD/JPY daily chart (as of 7/16/2013) has dropped from the 7/8 high of 101.50, and recently found temporary support at the 7/11 low of 98.30. The 98.30 level is close to the 38.2% Fib retracement of the 101.52 high on 7/8 to the 93.78 low on 6/13. The drop from 101.50 occurred after a test of the lower bound of an uptrend channel extending from late 2012 (as shown on the daily chart). Currently price has stalled around 100.00, which is a very important psychological level to watch.
Price needs to clear the 100.00/50 resistance area and the key 101.50 level to resume its uptrend move. Resistance levels above 101.50 are located at the 5/29 high of 102.50, followed by the 5/22 high of 103.70. In the event of price being capped by 100.00/50, it could slide to test support levels at 98.30 (7/11 low), 98.70 (6/24 high), 97.60 (50% Fib retracement), and then 96.70 (61.8% Fib retracement and the 3/12 high, also close to the 5/1 and 6/25 low of 97.00). The daily RSI is falling from below 70 and trying to find support at 50. Note the MACD is forming a “death cross” from above zero.
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