Technical Analysis USDJPY : 2014-05-21

Hello dear traders. Today we are going to analyze the US Dollar against the Japanese Yen. The currency pair after long sideways between 104.12/100.75 has approached bottom of that range and threatens to breach it. The last time that the support at 100.75 was visited was on the 5th of February. The difference now is that a reversal pattern has formed suggesting that negative structure could be developed as we can see at the chart.

In addition, now the oscillators are not oversold. The OsMA oscillator still has lots of room until the previous troughs line and Stochastic in case of a downtrend establishment is allowed to be oversold, level for contrarian warnings is repositioned at 10. In our opinion the support at 100.75 represents a strong support but could be breached in the medium-term. We would follow the short side in case of penetration but caution is advised, using low risk/reward ratio. Based on our technical analysis, first price target could be seen at 100.00 due to its psychological importance, ahead of 98.98.

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