USD/JPY is consolidating its losses above the 2011 lows and price action is distinctly “heavy” in appearance. The long-term down trend has potential to continue on a break of the 16/3/11 low of 76.12. The following analysis looks at nearby Dollar/Yen support/resistance targets and confluence areas.
USD/JPY Daily Chart
- The USD/JPY 2011 low is located at 76.12 and was hit on the 16/3/11
- Price is currently in a consolidation phase and trading at 76.49.
- Previous 6 daily candles are within a 100 pip range, this kind of consolidation is often followed by increased volatility.
- Fibonacci expansion target from 81.62 > 76.28 > 80.23 (see white expansion levels below) has the FE100 just below 75.00 and FE 161.8 around 71.57.
- Fibonacci expansion target from 85.52 > 76.28 > 80.23 has the FE 61.8 level at 74.50 and FE100 around 71.00.
- A combination of the aforementioned Fe100 combined with psych number 75.00 gives a potential target at this 75.00 level on a break of the range lows.
- A more ambitious target of approx 71.50 could potentially be sought by USD/JPY bears as this would, after all, be with the longer-term trend.
- Any failure on a break lower or subsequent intervention by the BOJ would bring the 79.65 pivot level back into focus as resistance.
There is high potential for intervention at the current levels and this should be factored into any strategy. Any volatile move lower could make this a higher possibility scenario.
USD/JPY Fibonacci Expansion Chart