Technical Analysis – USDJPY 4-hourly: uptrend looking to reestablish itself
December 6, 2013 10:20 am
(click to enlarge)
As a result of Bank of Japan’s turbo-charged monetary stimulus and positive risk sentiment, the US dollar rallied strongly versus the yen during the first half of 2013.
Since late May however, the dollar has been in a consolidation pattern, unable to break the May high just below the 104 level, which is also the five-year high for the pair.
This week the US dollar made a new six-month high at 103.38, but there is a short-term challenge to the uptrend that has been in place since the first few days of November.
This uptrend will remain in place as long as the 101.12 support level (previous low) is not violated. The 100 yen level could also act as support, as in addition to its psychological importance, it is also very near where the 200-period simple moving average is currently at (99.84).
The pair is trading very near its 21-day exponential moving average and any move above or below that could weigh short-term bullish or bearish respectively.
The pair will have to break above its recent high of 103.36 to confirm the continuation of the bullish move.
The MACD is in negative territory and also a little below its red signal line, which has a bearish interpretation.
To sum up, a short-term correction in the dollar’s upmove is underway, although it is expected that the 101.12 level will hold if challenged. Most traders will probably be looking to reenter long dollar/ short yen positions as the long-term trend remains bullish for the greenback, with stops placed somewhere below the 101 or 100 level.
(click to enlarge)
As a result of Bank of Japan’s turbo-charged monetary stimulus and positive risk sentiment, the US dollar rallied strongly versus the yen during the first half of 2013.
Since late May however, the dollar has been in a consolidation pattern, unable to break the May high just below the 104 level, which is also the five-year high for the pair.
This week the US dollar made a new six-month high at 103.38, but there is a short-term challenge to the uptrend that has been in place since the first few days of November.
This uptrend will remain in place as long as the 101.12 support level (previous low) is not violated. The 100 yen level could also act as support, as in addition to its psychological importance, it is also very near where the 200-period simple moving average is currently at (99.84).
The pair is trading very near its 21-day exponential moving average and any move above or below that could weigh short-term bullish or bearish respectively.
The pair will have to break above its recent high of 103.36 to confirm the continuation of the bullish move.
The MACD is in negative territory and also a little below its red signal line, which has a bearish interpretation.
To sum up, a short-term correction in the dollar’s upmove is underway, although it is expected that the 101.12 level will hold if challenged. Most traders will probably be looking to reenter long dollar/ short yen positions as the long-term trend remains bullish for the greenback, with stops placed somewhere below the 101 or 100 level.
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