USD-JPY Stages a Shaky Recovery

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 ( fxtechstrategy.com) -- A sharp recovery saw USD-JPY closing higher on Tuesday but it continues to hold its downside vulnerability. Unless we see a return above its key resistance at the 84.17 level, the risk is for USD-JPY to return to the 81.86-to-81.55 levels.

We may see price hesitation or even a reversal of roles, turning resistance into support here and thus turning the pair higher. However, if these levels fail to hold, further weakness should build up toward the 80.57 level where a breach will target the 78.18 area.

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On the upside, a return above the 84.17 level is required to resume its upside toward the 85.49 level and then the 86.88 level. All in all, as long as USD-JPY continues to trade and hold below the 84.17 level, there is risk of a consolidation with downside bias.

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 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.