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USD/JPY Technical Analysis Report 20 Jan 2021

USD/JPY Technical Analysis Report 20 Jan 2021

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Over the span of four years, USD/JPY carved out a descending triangle pattern between 118.66/104.62.

Although December pursued terrain south of 104.62, January has so far arranged a modest comeback and is within relatively close range of retesting 104.62.

104.62 ceding ground, however, throws light on support from 101.70, with a break uncovering trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).

Daily timeframe:

Partly modified from previous analysis –

Since last Wednesday, buyers and sellers have been squaring off ahead of trendline resistance (111.71), following the 103.08 support rebound at the beginning of January.

Beyond the aforesaid areas, demand is visible at 100.68/101.85 (encases monthly support at 101.70) and supply can be found at 106.33/105.78 (the 200-day simple moving average circles the lower side of the supply).

Also prominent is the RSI indicator recently crossing paths with resistance at 57.00, a level obstructing upside since July 2020.

H4 timeframe:

Technical change on this chart has been somewhat limited since the currency pair entered a narrow consolidation a week ago.

104.16 resistance and demand at 103.46/103.58 (prior supply) remain centre stage. Downriver, demand is set around 102.95/102.82, arranged beneath daily support at 103.08, while skies above 104.16 are relatively blue until resistance at 104.76—placed north of 104.57 (December 10 high).

H1 timeframe:

Early movement on Tuesday, in the shape of two heavy-handed H1 bullish candles, toppled the 100-period simple moving average and greeted 104 resistance and supply at 104.03/104.10 (prior demand). As you can see, this provided enough fuel to facilitate a retest at the 100-period simple moving average at 103.84.

Buyers holding the aforesaid SMA suggests selling is thin and consequently may shift interest north of 104 to 104.32 resistance.

Observed levels:

Short-term buyers from the H1 timeframe’s simple moving average has an ultimate target set around 104.62 (based on the monthly timeframe). 

However, before reaching this far north, 104 resistance, supply at 104.03/104.10, 104.32 resistance and 104.50 resistance must be taken on the H1, along with 104.16 resistance on the H4. A H4 close above the latter may be interpreted as a bullish cue we’re headed for 104.62 on the monthly timeframe, and possibly H4 resistance at 104.76.

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