Short-term technical outlook on USD/JPY (Tues 17 Jul)
- USD/JPY has started to consolidate in a minor bullish “Pennant” continuation range configuration since its 112.80 high of 13 Jul 2018 after its recent bullish breakout on last Wed, 11 Jul from its former major descending trendline from Jun 2015 high at 112.00.
- The aforementioned “Pennant” consolidation is now forming right above a key short-term support at 112.05 which is defined by the median line of the medium-term ascending channel from 26 Mar 2018 low, the minor ascending channel support from 09 Jul 2018 low and close to the 23.6% Fibonacci retracement of the recent up move from 25 Jun 2018 high to 13 Jul 2018 high of 112.80.
- Both the daily RSI and hourly RSI remains in positive configurations which suggests that the pair is likely undergoing a consolidation rather than a distribution process for a deeper corrective pull-back.
- The next significant short-term resistance stands at 113.55/80 which is defined by the swing high areas of 12/21 Dec 2017, the upper boundary of the minor ascending channel from 09 Jul 2018 low (depicted in green on the hourly chart) and a Fibonacci projection cluster.
Key Levels (1 to 3 days)
Intermediate support: 112.25
Pivot (key support): 112.05
Resistances: 112.80 & 113.55/80
Next support: 111.30
Therefore as long as the 112.05 key short-term pivotal support holds and a break above 112.80 is likely to reinforce the start of another potential upleg for USD/JPY to target the next intermediate resistance at 11355/80.
On the other hand, a break below 112.05 puts the bulls on hold for a deeper pull-back to retest the 111.30 pull-back support of the former major descending trendline resistance from Jun 2015 high and the former medium-term swing high area of 21 May 2018.
Charts are from eSignal
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