Talking Points
USDJPY Daily
Technical Outlook: USDJPY has been trading within the confines of a broad descending pitchfork formation extending off the 2015 high with the pair rebounding off the lower median-line parallel last month. Although we’ve been marking some daily divergence into this recent low, the risk remains weighted to the downside while below resistance at the highlighted median-line confluence.The expected downward revision in U.S. 2Q GDP accompanied by fresh comments from Fed ChairJanet Yellen at the Jackson Hole Economic Symposiumtomorrowmay threaten the recent limits of the consolidation range and offer some guidance as to our near-term directional bias.
USDJPY 120min
ChartCreated UsingTradingView
Notes: The pair has been consolidating just above the July lows since the start of the week and we’ll be looking for a resolution heading into tomorrow’s event risk. Interim resistance stands with the weekly open at100.77with a breach above101.16 / parallel resistance (red) needed to validate a near-term reversal higher. Such a scenario eyes subsequent topside resistance objectives at the monthly open (102.28), the 38.2% retracement at102.60 &103.54.
It’s worth noting that this trade has become increasingly one sided and from a trading standpoint, I would be looking for a washout to the downside before inevitably reversing higher. Interim support rests with the July low / weekly opening-range low at 99.94/99backed by the August low at99.54and the Brexit / 2016 low at98.79. More meaningful structural support rests just below the98-handle. For the complete setup and to continue tracking thistrade& more throughout the week- Subscribe toSB Trade Deskand take advantage of theDailyFX New Subscriber Discount.
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---Written by Michael Boutros, Currency Strategist with DailyFX
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