USDJPY Lower High (D)
Created on Saturday, 08 August 2015 06:27
Written by Austin Galt
We are looking for a big correction in the USDJPY and we may well have the first lower high in place as of yesterday. Let’s review the technicals using the daily chart.
USDJPY DAILY CHART
I have added Fibonacci retracement levels of the move down from high to low. The first rally in a new bear trend often makes a deep retracement and that has certainly been the case here with price just hitting a high of 125.07 which was just below the 88.6% level.
Price turned down from that high and set up a bearish outside reversal candle. This candle may be consolidated before price continues down while breaking above this candle would seem bullish and likely indicate price is headed for new highs.
I have added a Fibonacci Fan which shows the recent high around resistance from the 88.6% angle.
The Bollinger Bands show price traded above the upper band which is often found at solid tops.
The RSI got up into oversold territory and while no bearish divergence set up this was also the case at the previous major low.
The Stochastic and MACD indicators both show a bearish divergence at this high. The Stochastic has just made a bearish crossover while the MACD looks to be threatening one.
Summing up, if the high is indeed in place which is my expectation then this should be the lower high while price cracking higher now would likely see new highs in short order.