USD/JPY Technicals – Uptrend at risk as 100.0 threatened

USD/JPY finally broke above 100.0 and stayed there for a considerable amount of time during today’s Asian session. However, bulls were unable to hold on to the gains once again, with price trading sharply lower during early European session, breaking the rising trendline that characterize the rally from 99.6. Price has also fell below 100.15 ceiling that has been in play yesterday, only managing to find some soft support around 99.9. If price breaks below 100.0 and 99.9, the rally from yesterday’s European session will be invalidated, putting 99.4 – 99.6 at risk.

Hourly Chart

This sell-off is in line with what stochastic is showing us, with readings currently signalling a bear cycle. Looking at the rate of fall, it is likely that Stochastic readings will hit Oversold when 99.4 – 99.6 is reached, which enhances the likelihood of the support level holding, and keeping the mid-term uptrend from 27th Jun intact.

Daily Chart

Daily Chart shows price faltering even before the rising Channel Bottom has been tested, showing the strong bearish pressure exerted from above. Looking at Stochastic, readings are pointing lower together with the Signal line, but we’ve yet to see a break of the 80.0 level, which means that a proper bearish cycle signal is not yet formed, but would almost certainly come if current bearish momentum continues. The failure to test the rising Channel Bottom may also be interpreted as a bearish rejection by the Channel, which invalidates the uptrend from Mar 2013 and suggest that a move back towards 94.0 or perhaps 93.0 is possible.

With NFP coming in a few hours time, we could potentially see USD behaving wildly following the news release, which will impact USD/JPY’s directionality. Even though USD/JPY has been spotted moving in opposite direction of broad USD trends recently, it is likely that JPY will still be affected by risk trends impacted by the NFP news. This is not a good thing, considering that interpretation of NFP numbers is still up in the air, implying that traders may need to be more caution and not determine USD/JPY direction based on initial price movements post NFP.

More Links:
WTI Crude Technicals – More Sideways Movement around 101.0
Nikkei 225: Approaching 14,450 before US NFP
NZD/USD Technicals – Trading back up within Support Zone

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