USD-JPY: The pair may be strengthening, but as long as its Jan. 21 high at 91.86 and the 92.00 level, its channel top, hold as resistance levels, we look for USD-JPY to weaken back toward the 88.54 level, its Feb. 4 2010 low.
On a decisive break below that level, the pair should decline further toward the 88.30 level seen on Dec. 14, 2009, with a turn below there shifting focus to its Dec. 9, 2009 level at 87.35 and then the 85.85 level, its Nov. 30, 2009 high.
Further weakness, if seen, will put pressure on the 84.80 level, its 2009 low. This view remains valid while the pair trades and maintains within its defined falling channel.
Conversely, to reverse our downside bias, USD-JPY must break and hold above the 92.62 level, its channel top, thereby clearing the way for higher prices toward the 93.74 level, its 2010 high. This will create further upside scope toward its Aug. 2, 2009 high at 97.77. On the whole, having reversed lower from the 93.74 level and having retained its broader bearish structure, further downside threats are seen toward the 89.12 and the 88.30 levels, though currently seeing strength.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.