USD/JPY: Technical Analysis Report 26 Jan 2021
(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).
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.
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.
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.
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.