USD/JPY has tentatively turned down after having bumped up against the key 80.50 resistance region late last week. This test of the 80.50 level, which is an important support/resistance level for USD/JPY, established a new 4-month high coinciding with the 50% Fibonacci retracement of the last major bearish run from the March 84.00 area high to the September 77.00 area low. If price is able to stay below the key 80.50 level and 50% retracement, any continued downside move off the current bearish turn could move towards an end to the bullish correction that has been in place since mid-September, and a potential move towards a retest of the important 78.00 level. In the event of a breakout above 80.50 on an extension of the current bullish correction, further potential resistance to the upside resides around the 82.00 price region.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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