The Post-FED Technical Outlook For The Yen

The USD is struggling to find solid footing against the majors as the Thursday U.S. session heats up. Yesterday’s FED announcements brought a hawkish tone to the Greenback, but short-term traders made an about-face at the commentary. The stated plan of a 24 month period of  “gradual tightening” did not phase skeptics — the USD fell significantly against the Euro, Japanese yen, and Canadian dollar.

The action in the USD/JPY came as a surprise to this analyst. My position trade recommendation proved a breakaway loser, with price failing at topside resistance.

Holding open positions into the FED announcements is inherently risky. We will see if the aftermath is a bit kinder to the trading account.

USD/JPY Technicals

Topside resistance on the daily chart proved valid for Wednesday’s session. The 106.50 handle stood tall in the USD/JPY, driving bearish participation.

Here are the key levels for today:

• Resistance(1): 20 Day EMA, 106.48
• Resistance(2): Daily SMA, 106.50
• Resistance(3): Bollinger MP, 106.67
• Support(1): Swing Low, 105.24

Overview: A bit earlier, this market tested support at the Swing Low of 105.24. If the intrasession low at 105.26 holds up, we will have a Double Bottom formation on the daily timeframe. It appears that this market is poised to rotate between the 106.50 and 105.25 area for the remainder of the week.

There is a live trade for the USD/JPY that is performing well over on the signals page. Check it out for a way of capitalizing on the current market dynamic facing the USD/JPY.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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