USD / JPY Technical Forex Analysis for Forex Traders

The Dollar/Yen did not break the support specified in yesterday’s report, not even with a single pip. It consolidated above it, and edged higher until it reached 86.43. We can classify that as a clear attempt to rebound, coming after the current falling wave (which we talked about several times) has reached its first suggested target at 85.52. Nevertheless, we see these attempts as weak and shallow. We believe the falling wave will continue to seek lower targets, after a limited correction, but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, since we still expect, as we did before, that it will dive below 84.81. Therefore, we expect the price to reach this target, and as we do, we also realize that the limited volatility of this pair indicates that this will take some time. As for the short term, the support is at 85.74, and breaking it would indicate that we are already moving lower with the objective of breaking 84.81, and reaching lows not seen in 15 years. This break will target 84.81 first, then 83.87. The resistance is at 86.58, and if broken, the price will continue its bounce, targeting 87.49 & the important 88.10.

Support:

• 85.74: Fibonacci 61.8% for yesterday’s bounce.

• 84.81: Nov 27th 2009 low, and the low of the last 15 years.

• 83.87: Fibonacci extension level 138.2% for the falling wave from 86.86, compared to the wave which started at 88.10.

Resistance:

• 86.58: the retest level for the rising trend line which combines the lows of Jul 16th & 22nd.

• 87.49: Jul 29th high.

• 88.10: Jul 28th high.