The USD/JPY continues to congest on the daily chart between a narrowing triangle pattern. This set up has traders looking at 116.00 and the near term high at 116.07 as a decision level for where a sustained breakout could strengthen. There will be resistance that USD/JPY will have to contend with as prices approach the psychological 116.00 level. In fact 116.00 is the key decision level on a number of potential set ups on the dollar-yen.
The 240 minute chart shows the pullback below the 115.50 level which has currently rallied as prices are currently trading above 115.80. The 15 minute chart highlights where the USD/JPY is likely to congest short term.
The support will likely remain just above the 115.50 to 115.55 area with resistance between 115.75 to 115.80. But the chart to keep an eye on for what the next leg in the USD/JPY will be is the daily chart. The daily is curreently squeezing between 116.20 resistance and 114.50 support.
As the U.S. Dollar is bouncing slightly from the 77.65 low set on October 1st, there is nothing but resistance overhead as traders continue to short any reasonable upside correction. In fact the U.S. Dollar is trading up against a short term downtrend line.
Raghee Horner is a private forex, futures, and stock trader based in South Florida. She is the author of two best-selling forex trading books and founder of EZ2Trade Software. All charts we used with permission from eSignal and Autochartist. For a 21-day trial of Autochartist chart pattern recognition software, visit www.autochartistu.com.
