Yen hits strong resistance as US dollar rebounds
USD/JPY formed a consolidation pattern through June then broke above trendline resistance at 111.50/60 last week. This made a short-term buy signal targeting strong resistance at 113.20/30.
This resistance is where the longer-term 61.8% Fibonacci meets the 200-week moving average in severely overbought conditions, both on the daily and weekly charts.
EUR/JPY has already reversed from the 200-day moving average. However, I am going to show you the more important hourly chart.
Note the small head-and-shoulders at the top of the chart, with the neckline broken yesterday. We are holding the 200-hour moving average perfectly but if this breaks we test the more important neckline of the bigger head-and-shoulders spanning the last week.
This just happens to be in line with the 23.6% Fibonacci support at 130.85/80. It held perfectly to allow a potential right shoulder to form. A break below here therefore acts as another sell signal to confirm a top at the 200-day moving average.
GBP/JPY is getting hit as the pound tumbles. You can see a significant reversal from very important one-year trendline and 500-week moving average and 38.2% Fibonacci resistance in the weekly chart below.
However, more importantly, look at the three-year trendline in the weekly chart below! It’s no wonder the trend has changed and the outlook turned very negative.
Technical Analyst & Trader
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