Markets improved Tuesday, a day after crude suffered a historic rout while the broader stock market recorded its worst day since the financial crisis. Demand for safe-haven assets diminished, with USD/JPY witnessing a stronger-than-expected recovery off multi-year lows.
Adding more than 295 points, or 2.85%, the pair conquered a number of big figures on the H4 timeframe, recently clocking highs at 105.91, a touch south of 106. The 38.2% Fibonacci retracement at 105.43 is attempting to hold price action, yet the unit remains sited above 105. The relative strength index (RSI), for those who follow momentum oscillators, will note the 50.00 value was taken yesterday.
Movement on the weekly timeframe faded Quasimodo support at 102.55, with resistance at 105.35 currently in motion. A break of this level sees minor swing lows potentially offering resistance, though key resistance resides off the 2019 yearly opening level at 109.68.
A closer reading of price action on the daily timeframe shows price elbowed its way north of 105.05 resistance, a prior Quasimodo support. Owing to this, the possibility of an extension higher could be on the cards, targeting resistance at 106.80 and 106.96, a Quasimodo support-turned resistance.
Weekly price recently grasping familiar resistance at 105.35 will likely encourage selling. A H4 close below 105 may help confirm seller intent off the weekly base, consequently shining the spotlight on 104 as the next downside target for shorts.
Continued upside, on the other hand, may draw the H4 candles above 106, exposing 107 as the next possible resistance. Should this occur, traders may seek breakout opportunities north of 106, targeting daily resistance at 106.80/106.96, followed by 107 mentioned above on the H4 timeframe.
Disclaimer: The information contained in this material is intended for general advice only.