Technical Analytics Report

USD/JPY Technical Analytics Report 11 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 recently arranged a modest comeback and is on course to retest the lower side of 104.62. 

104.62 ceding ground 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 – 

Support at 103.08, despite a relatively intense whipsaw to ten-month lows early in the week, reclaimed position following Thursday’s spirited recovery and Friday’s subsequent extension.

This has likely shifted focus back to trendline resistance (111.71), with a break unmasking supply at 106.33/105.78 and the 200-day simple moving average.

H4 timeframe:

Momentum diminished considerably Friday after price joined hands with an area of resistance composed of Fib levels around 104.00, sheltered just under a resistance barrier at 104.16.

Downstream, sellers have demand at 103.46/103.58 (prior supply) to contend with; higher up on the curve, however, resistance is seen around 104.76, spotted just above the 104.57 December 10 peak.

H1 timeframe:

Short-term action on Friday watched USD/JPY spike through 104 on three occasions, each time testing supply at 104.13/104.06.

Apart from Friday’s NFP-induced low at 103.60, 103.50 support is in the light if sellers continue defending the 104 neighbourhood.

Above supply at 104.13/104.06, H4 resistance at 104.16 is seen.

The picture coming out of the RSI indicator right now shows 44.40 support welcomed the value Friday, lifting above 50.00 by the close.

Observed levels:

Long term:

Higher timeframe action proposes a move to the lower side of the monthly descending triangle pattern at 104.62 this week, aligning with daily trendline resistance.

Short term:

H4 resistance between 104.16/104.00 delivers reasonably appealing confluence to work with. However, the fact sellers were unable to maintain a bearish stance Friday, and with the higher timeframes eyeballing 104.62 resistance, this could stir a breakout higher. A short-term bullish scene may arise as a result, with buyers also likely watching for a 104 (support) retest to form.

As for resistance, the H4 level at 104.76 may generate interest should the market breakout higher. This level shares space with the monthly 104.62 level and daily trendline resistance.


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