USD/JPY daily Chart 8:45AM EDT 9/11/2012
The USD/JPY has been in a triangle seen in the daily. The triangle is breaking to the downside during the 9/11 trading session. The focus right now is on the 77.66 support pivot from June 1, 2012.
It should be noted that the price action coming into this triangle was bearish, so the breakout is a bearish continuation signal. The RSI has been held under 60 after kissing 30 and pulling back up. This shows that the bearish momentum is still there, especially if the RSI falls back below 40, though the last dip in RSI failed to kiss 30, showing weak bearish momentum.
The bearish outlook might be limited however, as we see the USD/JPY test a bottom in the weekly chart – a bottom formed between July 2011 and February 2012. There are some support pivot in the 76.50-76.55 area. There is also a projected rising trendline between this and the current 77.66 low, near 77.00.
As the USD/JPY digs into these levels, BoJ intervention watch will be very strong, and there will be psychological support for the pair, especially if the price drop is sharp.
USD/JPY weekly Chart 8:55AM EDT 9/11/2012