Short-term technical outlook on USD/JPY (Tues 31 Jul)
- The recent slide of the USD/JPY from its 113.17 high of 18 Jul 2018 has managed to stall at the 110.80 key medium-term support which is defined by the lower boundary of the medium-term ascending channel from 26 Mar 2018 low, former swing high areas of 13 Jun/03 Jul 2018 and close to the pull-back support of the former major descending resistance from Jun 2015 high.
- Since hitting a low 110.59 on 31 Jul 2018, the pair has started to evolve into a minor bullish reversal “Inverse Head & Shoulders” configuration with its neckline resistance at 111.20 (see 1-hour chart).
- The short-term hourly RSI oscillator (a momentum indicator) remains in a positive dynamic holding above a significant corresponding ascending support at the 40 level.
- The next significant short-term resistances stand at 111.90 (50% Fibonacci retracement of the recent slide from 18 Jul 2018 high to 31 Jul 2018 low & exit potential of the “Inverse Head & Shoulders) follow by 112.20 (61.8% Fibonacci retracement of the recent slide from 18 Jul 2018 high to 31 Jul 2018 low & the former minor swing low areas of 16/17/20 Jul 2018).
Key Levels (1 to 3 days)
Pivot (key support): 110.80
Resistances: 111.20, 111.90 & 112.20
Next support: 110.28
Therefore as long as the 110.80 key pivotal support holds and an hourly close above 111.20 is likely to reinforce a potential up move to target the next intermediate resistances at 111.90 follow by 112.20 in the first step.
However, failure to hold at 110.80 shall damage the medium-term uptrend for a deeper corrective decline towards the next short-term support at 110.28.
Charts are from eSignal
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