USD/JPY 1H Chart 8:50AM EDT 8/28/2012
The 1H USD/JPY chart shows a market that has been consolidating since it fell after the FOMC meeting minutes showed more urgency to consider QE3, which slapped the USD across the board. In the previous USD/JPY update, I noted that it was holding above a rising trendline, which has held price action throughout August (seen more clearly in the 4H chart).
The US Dollar – Japanese Yen pair consolidated into a flag pattern above this rising trendline.Then the 8/28 Asian session saw a slide and breakout below this flag pattern. As we start 8/28 US trading, we observe a pullback, and a rejection – price action that confirms the breakout and exposes the bearish outlook in the short-term.
We do still need to clear the rising August trendline, which should be seen with a clear below 78.50. This opens up a pivot at 78.14, and then 77.90, which is the August low, made on August 1. Below that the 77.62 support pivot from June 1 is a key level.
USD/JPY 4H Chart 8:50AM EDT 8/28/2012