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Posted by Fan Yang


I am a Chartered Market Technician, but my first encounter with the markets started back in the internet bubble when I thought I was picking great stocks because of great fundamental analysis. While fundamental analysis is an essential part of assessing the market, even the most professional research could be irrelevant without proper experience in the markets. When the bubble burst, I realized that the market is always changing so we must always keep up, but the changes are also anchored to the past so we must understand its history as well.

USD/JPY at Rising Trendline Support and Fibo Cluster

by Fan Yang on September 12, 2013

in Forex

Forex Technical Update

USD/JPY 1H chart 9/12/2013 8:10AM ET

usdjpy_09122013h1

(Click to enlarge)

NFP, throwback: The USD/JPY fell after the NFP weakened the USD, but found support at 98.53 and rallied above the 100 handle and the week’s high at 100.20. However, the market retreated into a throwback from the 100.57 high during the 9/11 session. As we get into the 9/12 US session, it is at a key area.

Speedline, fibo: The USD/JPY is testing a rising speedline, seen more clearly in the 4H chart, that comes up from the 96.81 low from Aug. 27. 99.31 is also 61.8% retracement of the upswing from Friday to Tuesday. It was also a support pivot from Monday. There is a bullish divergence with the RSI. Price almost closed the “gap” seen in many retail trading platforms.

I would say there are some downside risk to 99, but if the market is to remain bullish it should not breach that. A break below 98.95 for example should neutralize the bullish outlook we had when USD/JPY broke above 100 and extended higher last week.

4H chart: The 4H chart shows that 99.15-99.20 is a support/resistance pivot area going back to the August 23 high, and even back in July in left parts of the chart not shown here. Also note that the 99.14 level is 38.2% retracement, making the 99.14-99.31 area a fibo cluster. The 4H RSI is also around 40, where it held before, and should hold if the momentum in this time-frame is to remain bullish.

Let’s see if the market will maintain its bullish outlook by finding support here. Otherwise, it is difficult not to switch to a sideways scenario, with some near-term bearish outlook, if the market breaks and holds below 99.

USD/JPY 4H chart 9/12/2013 8:13AM ET

usdjpy_09122013h4

(Click to enlarge)

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

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