Stalking USD/JPY Rally for Topping


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  • 4H: The 4H chart of the USD/JPY shows the market in a 2nd correction rally swing. It has already surpassed the 100% swing projection.
  • With a strong candle to do it, the market looks poised for a bit further correction.
  • Note the RSI making a higher high, but the price level unable to when compared to the highs between Aug. 31 and Sep. 5. near 84.50.
  • In fact the current correction rally can be projected to the 84.50 area. This is 61.8% retracment of the downswing since the 3rd.
  • This is also 150-161.8% expansion of the first correction swing from 83.35 to 84.00.
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  • Day: If today’s candle closes above 84.00 (observed in the 4H chart as the last pivot), then the market may be a in bit of a reversal. This reversal can be very quick, with the first resistance at 84.50.
  • If that is broken, the market can rally towards 85.50/60 (38.2% retracement), but the 85.30 area is the powerline that was support and then resistance. The market is likely to back reverted back to the SMA-50 in red as well seeing additional resistance if the market is bearish.
  • Then there is also resistance at 50.0% at 86.30. This is both a fibonacci retracement level and a powerline treated as support then resistance.
  • Then the pair can rally to 87.00 area, which is the 61.8% retracement.
  • All this can be within the bearish mode or a ranging mode with bearish bias.
  • Only if the market can break above 87.0, should you start to consider the bullish scenario. Until then look for topping on the current rally.