USD / JPY Technical Forex Analysis for Forex Traders

The Dollar/Yen has tested (and surpassed) the falling trend line from Jun 4th top, which we talked about in Friday’s report, and said that it is at 85.28. Then it closed very close to it at 85.21. Although it came close to the 86 level after this week’s open, reaching a 9-day high, it came back down in the midst of the disappointment of the BoJ this morning. If we break this line decisively, the downtrend which started on June 4th will be over, and the Dollar will be ready to takeoff. The “verbal intervention” last week may and may not be the reason for this 200+ pips bounce after reaching a 15-year low, but technically breaking this line means a lot regardless of the Japanese authorities’ position. Resistance is at Friday’s top 85.43, and if broken we expect the Dollar to soar targeting 86.81 & may be 87.70. And in order to keep the chances of sustained break of this curtail trend line, we need to hold above the rising trend line from Tuesday’s bottom which is currently at 84.77. But, if this level gives way, then what we have seen so far of the Dollar’s fireworks is everything it has! And this jump from Tuesday’s 15-year low will be nothing but a correction. The price will continue falling, targeting 83.56 first, then our long awaited target 82.50.

Support:

• 84.77: the rising trend line from last Tuesday’s low on hourly chart.

• 83.58: the 15-year low reached on Tuesday.

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

Resistance:

• 85.43: Friday’s top which is just above the falling trend line from June 4th top on the hourly chart.

• 86.81: Jul 26th & 27th low.

• 87.70: June 26th top.