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Fan Yang

USD/JPY Awaiting Breakout from the 112.50-115.50 Range

The USD/JPY pair got a boost after US 2016 Q4 GDP data last Friday. However, it failed to extend the bull run into this week.

USD/JPY 4H Chart 1/31


(click to enlarge)

Reaction Around GDP Data:
- The 4H chart shows that there was a little bit of volatility around the GDP data release.
- Price eventually ended higher and closed just above 115.00.

Resistance:
- The previous resistance was around 115.50 and price once again held under 115.50.
- Now if price were able to hold above 114, we might be able to say that price looks to be anchoring higher.
- However, price closed the 1/30 session below 114.
- We don't have any bullish bias, but simply a consolidation range. between roughly 112.50 and 115.50.

Breakout Anticipation:
- We should anticipate support in the 112.50-113.00 area.
- However, a break below 112.50 could open up the next key support/resistance pivot, which is around 111.30.
- Below that the 110.00 psychological level would be in sight.
- If the market pushes back above 115.50 on the other hand, the 2016 rally could continue.
- This means price could come back to at threaten the highs around 118.60.
- Because of the prevailing uptrend in 2017, I have stronger confidence for the potential gain of a bullish breakout than the gain for a bearish breakout.

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