USD-JPY Retreats to Consolidation Zone

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( - The USD-JPY pair took back most of its Wednesday losses to close lower Thursday, re-enforcing its hold within its established consolidation zone (77.85 to 75.92).

USD-JPY has to overcome the 77.85 level and its falling trendline at 77.40 to convince the market it has put in a temporary bottom. The pair has been weakening since topping out at the 124.13 level in June 2007.

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Unless that scenario plays out, we could see the pair turning back lower toward the 75.92 level with a loss of there setting the stage for further weakness towards the 74.00 level. Further down, support stands at 73.00 and then the psychological level of 72.00. Its daily RSI is bearish and pointing lower suggesting further weakness.

On the upside, the pair will have to break and close above the 77.40 to 77.85 levels, its Aug. 4 falling trendline, to put in a bottom and create scope for more gains toward the Aug. 4 high of 80.19 level.

Further out, resistance lies at the 81.47 level, its July 8 high and again at the 82.21 level.

Mohammed Isah is a technical strategist and head of research at, 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 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 At, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces The Professional Suite 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.