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USD/JPY has rallied and failed at the 114.02 resistance line, points out Karen Jones, Analyst at Commerzbank and suggests that it should allow for a slide back into the range possibly to the 2 month support line at 112.12, but look for this to then hold.

Key Quotes

“Above the market lies the 114.55 October high and the 115.60 61.8% Fibonacci retracement – this represents very tough overhead resistance. The 55 day ma at 113.04 guards the base of the cloud at 112.16 and the 122.12 support line.”

“Only failure at the 112.16 cloud support and support line would target the 110.43/109.77 200 day moving average and August low. If the 109.77 August low were to give way, the June 8 low at 109.20 would be in focus. Failure there would imply a slide back to the 108.12 May 29 low and the mid-February high at 107.91.”