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Key Technical Levels for USD/JPY (4/6)

The USD/JPY fell after the NFP jobs report disappointed, but I am not impressed by the bearish attempt so far.

USD/JPY 4H Chart 4/6

(click to enlarge)

The 4H candle around the NFP reaction was sharp, but there was not follow-through below 118.75 yet. Let’s say there is a pullback. A bearish market should find resistance at 119.50. However, if USD/JPY pushes above 120, we are very likely going to see a bullish continuation. It would basically reflect a market shaking off the poor jobs data. In this scenario, we can anticipate an attempt to push towards 121.70 (2014-high) to 122.00.

Let’s say price does hold under 119.50 for the most part, given some elbow space in the intra-session time-frame. Below 119.50, USD/JPY has pressure on a key support around 118.20. This is a previous support pivot, and also the central pivot of the multi-month consolidation range seen in the daily chart.

USD/JPY Daily Chart 4/6

(click to enlarge)

A break below 118.20 would essentially keep the USD/JPY in consolidation in the medium-term, and open up a short-term bearish outlook towards the 115.56-116 range support area.

The USD/JPY has been bullish in the long-term or at least since the historic low of 75.56 in late 2011. So, we should respect the 115.56-116 consolidation range support if 118.20 does not hold as one.

On the other hand, a break below 115.50 would complete a double top in USD/JPY and signal a shift from its medium-term consolidation into a more bearish correction mode. This scenario would open up the 110 handle and previous resistance area back in September/October 2014.