USD / JPY Technical Forex Analysis for Forex Traders

The Dollar/Yen broke the support specified in Friday’s report 85.74, and dropped to a new yearly low at 85, only 19 pips above the 15 year low we have seen in November 09! With this, the falling wave has successfully managed to reach yet another target, 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 85.31, 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 83.87 & at a later time 82.65. The resistance is at 85.89, and if broken, the price will continue its bounce, targeting 86.58 & 87.49.

Support:

• 85.31: Aug 4th low.

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

• 82.65: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.

Resistance:

• 85.89: the falling trend line from Jul 28th high on intraday charts.

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

• 87.49: Jul 29th high.