USD/JPY (daily chart as of March 12, 2014) broke out above the
short-term uptrend support/resistance line (line 1 on chart) on March 4
and above the key resistance level of 102.85 on March 6. Then the pair
touched a high of 103.75 on March 7 before it retreated to test the
102.85 mark again today.
As mentioned in our previous analysis, a key level to watch is 102.85, the January 13 low and February 21 high. Price has been under pressure below 102.85 and trading in a zigzag pattern against the daily EMA 100 for more than a month. Technically, we require a strong breakout of a major resistance level with follow-through action to confirm.
However, it appears that the recent breakout of 102.85 has been weaker than expected (gray shape on chart). The candlestick of March 7 had a very long upper shadow, followed by two small candlesticks with their entire trading range engulfed by the first one. Plus, there was a bearish candlestick yesterday that traded through below 102.85.
Today, price traded through 102.85 for the second time. As of this writing, it found temporary support at the daily EMA 20/50, also at the uptrend support line 1. The pair needs to close above 102.85 to keep up its recent upside momentum. If it is unable to clear 102.85, it could turn down to test the daily EMA 100 once again.
Support levels below:
1st support: uptrend support line 1 or daily EMA 20/50
2nd support: daily EMA 100
3rd support: uptrend support line 2
Resistance levels above:
1st resistance: 102.85 (key resistance level)
2nd resistance: 103.75 (March 7 high)
3rd resistance: 104.85 (January 22 high)
As mentioned in our previous analysis, a key level to watch is 102.85, the January 13 low and February 21 high. Price has been under pressure below 102.85 and trading in a zigzag pattern against the daily EMA 100 for more than a month. Technically, we require a strong breakout of a major resistance level with follow-through action to confirm.
However, it appears that the recent breakout of 102.85 has been weaker than expected (gray shape on chart). The candlestick of March 7 had a very long upper shadow, followed by two small candlesticks with their entire trading range engulfed by the first one. Plus, there was a bearish candlestick yesterday that traded through below 102.85.
Today, price traded through 102.85 for the second time. As of this writing, it found temporary support at the daily EMA 20/50, also at the uptrend support line 1. The pair needs to close above 102.85 to keep up its recent upside momentum. If it is unable to clear 102.85, it could turn down to test the daily EMA 100 once again.
Support levels below:
1st support: uptrend support line 1 or daily EMA 20/50
2nd support: daily EMA 100
3rd support: uptrend support line 2
Resistance levels above:
1st resistance: 102.85 (key resistance level)
2nd resistance: 103.75 (March 7 high)
3rd resistance: 104.85 (January 22 high)
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