USD/JPY ANALYSIS
The Japanese Yen (JPY)[1] has remained resilient against the US Dollar[2] despite vaccine optimism. The safe-haven currency may have room to appreciate further against the weakening Dollar but how will this unfold as we enter the December?
TECHNICAL ANALYSIS
Chart prepared by Warren Venketas[4], IG
The weekly chart has been fluctuating between the 103.00 – 105.00 region over the past few weeks after bears pushed below the multi-year descending triangle support (105.00). Attempts to stay above the 105.00 level have been unsuccessful evident by the long upper wick candles. This lack of conviction to the upside has rooted the 105.00 level as a strong resistance target.
This longer-term outlook seems to be skewed toward further downside which could target the March low support zone (101.18) which coincides with the 50% Fibonacci level at 100.91.
Chart prepared by Warren Venketas[7], IG
Short-term price action[8] exhibits a strong downward trend[9] within a structured channel (blue). The highs within the channel have established a resistance on the Relative Strength Index (RSI)[10] around the 59 level (red). While this level is still a distance away from topside resistance, it will be interesting to see whether or not price breaks out of the recent symmetrical triangle[11] and move toward the upper end of the channel or will upside momentum fade, showing less conviction from bulls.
A confirmation breakout from the triangle formation to the upside will bring the 105.00 psychological level[12] into consideration after which, the recent swing high 105.67 as extended resistance.
A break to the downside
