USDJPY is going up 05.01.2012 - technical analysis and trade recommendation

Last week USDJPY bounced down after reaching the downtrend line. Downward movement was stopped in the area of 76.85. It corresponds to the middle of the big bullish candle formed on October 30. This area was support before, so it seems that now this level is a great place to react and move up.

Rate hit the major support - USDJPY weekly chart

Yesterday on the daily chart small bullish candle with long shadows was formed. It suggested that the downward movement dynamic was depleting.

After hitting the support bullish formation is formed - USDJPY daily chart

Today brought us a dynamic breakout from consolidation in 76.60 – 76.83 area. This currency rate crossed over the downtrend line which was forming since 28’th December . 

The rate has reached the 77.15 area.  I expect some correction now, but decrease should not be deeper than 76.95. Suggested transaction is a buying position after closing above 77.15 with the target of 77.50.

Crossing over downtrend line - USDJPY 4-hours chart

Trade recommendation: Buy after closing above 77.15 Take profit level: Target : 77.50