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USD/JPY: Technical Analysis Report 26 Jan 2021

USD/JPY: Technical Analysis Report 26 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 attempted a comeback and is within relatively close range of retesting 104.62.

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

Daily timeframe:

Brought forward from previous analysis –

Overall, buyers and sellers remain squaring off between trendline resistance (111.71) and 103.08 support.

Beyond the aforesaid areas, demand at 100.68/101.85 is visible (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 crossed paths with resistance at 57.00, a level hindering upside since July 2020.

H4 timeframe:

Partly modified from previous analysis –

Local trendline resistance (104.39) made an entrance on Monday, fuelling a shooting star candle pattern (red arrow).

Countering trendline resistance today throws light on last Thursday’s low at 103.32, positioned ahead of a Fib cluster around 103.28 (a collection of Fibonacci levels formed around a specific price level). Upstream, however, may direct focus to resistance at 104.16.

H1 timeframe:

Monday spent the day getting to know the 100-period simple moving average at 103.67, withstanding a number of downside attempts.

Current candle action, as you can see, is on the verge of closing out by way of a hammer pattern. Voyaging higher from here places 104 resistance and supply at 104.03/104.10 on the radar, while lower on the curve shines light on 103.50 support.

RSI fans will also note the indicator is balancing off the 50.00 centreline.

Observed levels:

H1 buyers respecting the 100-period simple moving average around 103.67 hinders sellers from H4 trendline resistance.

With the immediate trend facing south since March (2020), H1 buyers may be out of their depth. A H1 close under the 100-period SMA today, therefore, could spur intraday selling to at least 103.50 support on the H1.

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