Rally of prices approaching critical resistance

The Japanese yen fell (USD / JPY) by nearly 3% from the May highs, the price now approaching an area of ​​technical importance. There are updated intraday levels and disability levels that matter on the USD / JPY price charts Review this week's Strategy Webinar for a detailed badysis of this configuration and more.

USD / JPY Chart

Technical Outlook: In last week's Technical Perspective of the Japanese Yen we noted that USD / JPY continued to consolidate key resistance range at 110.88-111.65 – a region defined by the 61.8% retracement of the November liquidation and the 50% of the broader decline at the end of 2016. "Note that the base resistance at the slope which extends above the 2017 peak and the ascending line ] converges to this upper limit and further accentuates the technical significance of this level.

The initial daily support now rests on 110.70 with a bullish invalidation now carried to the 200-day moving average / 50 lines around ~ 110 . A breach / close above 111.62 would be necessary to keep the bias long viable with such a scenario targeting the opening of 2018 to 112.65 supported by the 61.38% retracement to 113.27 [19659007]

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USD / JPY 240min Price Table

Notes: Take a closer look at the USD / JPY action showing the approaching pair may highs at 111.40 with RSI intraday deep into overbought territory. The immediate threat remains higher but we are on the lookout for a reaction on the transition to confluence resistance at 111.62 – area of ​​interest for possible depletion / losses. short entries.

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Bottom line: We are looking for exhaustion on a stretch in this key resistance zone in the coming days. Look for a break below the weekly troughs for this to be done with a drop of sub- 110.04 needed to suggest that a higher is in place.

For a complete breakdown of Michael's business strategy, revise his series Foundations of Technical Analysis on B using a T rading S trategy [19659004] USD / JPY Trader Positioning

• A summary of IG Customer Feeling shows that traders are net – short the USD / JPY – the ratio is + -1.33 (42.9% of traders are long) – bullish reading
• T the raders have remained net-short since June e 28 [19659007] ; price has increased by 0.9% since
• Long positions are 5.5% lower than yesterday and 3.0% lower than last week
• Short positions are [19659007] 11.9% higher than yesterday and 10.4% higher than last week
• We generally take a contrarian view of crowd sentiment, and the fact that traders are short-term suggests that JPY prices in US dollars / could continue to increase. Traders are even shorter than yesterday and last week, and the combination of current positioning and recent changes gives us a more pronounced bias from 1965 to 007 [/ JPY] point of view sentiment.

See how the changes in retail positioning USD / JPY have an impact on the trend – The is more about the feeling!

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Data Losses USD / JPY

Economic Calendar – atest e Economic Survey ] developments and u pcoming event ri sk

Other configurations in play

– Written by Michael Boutros Currency Strategist with DailyFX

Michael on Twitter @MBForex [19659110] or contact him at [email protected]