USD/JPY Price Analysis: Daily 38.2% correction before test of monthly resistance
|- USD/JPY has melted below the monthly support area but has started to stall on US dollar strength.
- An upside bias on the lower time frames would coincide with a restest of the monthly structure.
The following is a top-down analysis that illustrates the market's structure and the probability of a bullish correction on the monthly and weekly charts following a downside correction on the daily chart.
Monthly chart
While the price has penetrated below monthly support, the structure would now be expected to act as resistance on a re-test.
Weekly chart
The bullish weekly W-formation is a bottoming pattern.
The price could be set to close above the support structure and trendline resistance this week.
Daily chart
From a daily perspective, here we have an overextended W-formation within a weekly W-formation.
Before extending higher, the price would be expected to correct back to towards the neckline of the weekly formation which meets with a daily 38.2% Fibonacci retracement level and prior resistance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.