Although the US dollar index, or DXY, managed to reclaim lost ground Wednesday, USD/JPY remained under pressure as risk-off flows continued to dominate markets. Tuesday observed a number of big figures abandon ship, with price clocking highs at 105.91, a touch south of 106. The 38.2% Fibonacci retracement at 105.43 offers resistance, as the pair settled below 105. The relative strength index (RSI), for those who follow momentum oscillators, will note the value is seen fluctuating around the 50.00 value.
Movement on the weekly timeframe faded Quasimodo support at 102.55, with resistance at 105.35 containing upside. A breach realises minor swing lows potentially offering resistance, yet key resistance resides off the 2019 yearly opening level at 109.68.
A closer reading of price action on the daily timeframe shows price exhibits scope for moves higher, 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 increased selling. A H4 close below 104 may help further confirm seller intent off the weekly base, consequently shining the spotlight on 103 as the next downside target for shorts.
Upside, on the other hand, is complicated. Not only is 105 in the firing range, the 38.2% Fibonacci retracement at 105.43 offers resistance, while not forgetting weekly resistance 105.35.
Disclaimer: The information contained in this material is intended for general advice only.