International Trading

USD/JPY Declining after a Gartley Retracement

• 4H: I was stalking the USD/JPY all last week as it rallied from 83.60. Resistance was first seen near 85.00. However, the threshold for the rally not to trigger a more intermediate term bullish attempt it the central pivot of the previous consolidation zone.
• The gray fibonacci study shows 50% at 85.60, and 61.8% at 85.81. The market was rejected in this zone, so even though there was a violation it was brief. The rejection is more significant.
• The pivot was also 78.6% retracement of the decline from 86.40 area to 83.60. This is a strong retracement and was fueled by prospect of Japanese intervention in the Yen.
• However, it does not seem to be the concern to start the week. The market stays under the 200SMA in the 4H chart.
• The subsequent decline has been strong in the Asian/European session.
• Ahead of the US session, the market is testing a short-term rising support. A break below should accompany a break below 40 in the RSI, which is a bearish swing signal. In the near-term, the target is 83.00.
• I have shown the monthly chart last week, but here is a reminder of the bearish scenario that points even lower than the historic low at 79.75. A swing projection suggested by the negative RSI reversal signal, targets the 78.50 area.