USDJPY had a sharp fall last week but the support came just over the psychological level of 80.00 and the pair moved strongly upwards to go as high as 81.87 and to close for the week at 81.81. With such a move USDJPY has broken over the resistance mentioned 2 weeks back (please check usd/jpy forecast), i.e. 81.50 to 81.75. As we had mentioned this range represented Fibonacci 61.8% retracement of the downward move during April 5th to October 30th and also the strong resistance zone during May 31st to July 8th 2011.
The failure of the break below the psychological level of 80.00 and then the resistances mentioned keep the bullish outlook intact for USDJPY. On the upside, with a support over 80.80 intact, we will expect some resistance near 82.22 which represents the resistance during May 19th to 25th, 2011. With a break of this the currency pair should move towards 83.10 i.e. the next Fibonacci retracement level of the above mentioned downward move. A decisive break over 83.20 should bring frequent resistance near 84.20, 84.60 before a move towards the psychological level of 85.00 takes place.
On the downside if the pair breaks below the support over 80.80 then we would expect further correction towards 80.00 psychological level.
Please note that for USD/JPY a decisive break over 85.52 is important for the rally to continue.
Further Readings:
1) Daily technical USD/JPY Analysis.
2) Trade discussions on forex forum.