Support & Resistance
Nice Support becoming Resistance on USD/JPY
January 20, 2010
FX Monte
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Chart Analysis
Looking at the JPY/USD 4 hr chart we can see that on 1/10/10 there was some past support that became resistance. This was a great opportunity to capitalize on because it always lessens the risk.
So as we were looking to the downside on this particular area the market found it difficult to rally due to the past support. The market made three separate attempts to rally above the resistance area only to continue the trend to the downside.
Analysis
As we watch our chart, overtime they market becomes somewhat predictable. Clearly when the market is trending in a direction we know that it will continually have pull back. So as the market moves in the overall direction it will suddenly turn and pull back to a resistance or support area.
That is why it is always better to wait to enter a trade when it pulls back to support or resistance. That will then make for a low draw down on the trade. Obviously it will only be a low drawdown if you are right on the overall direction of the trade.
Market Forecast
20 WED
January 2010
| EUR/UD | GBP/USD | USD/JPY | USD/CHF | USD/CAD | AUD/USD | NZS/USD | |
|---|---|---|---|---|---|---|---|
| Resistance 3 | 1.4397 | 1.6377 | 91.22 | 1.0420 | 1.0313 | .9320 | .7438 |
| Resistance 2 | 1.4392 | 1.6410 | 91.18 | 1.0384 | 1.0292 | .9318 | .7435 |
| Resistance 1 | 1.4386 | 1.6515 | 91.05 | 1.0291 | 1.0277 | .9289 | .7399 |
| Current Price | 1.4293 | 1.6352 | 91.10 | 1.0329 | 1.0330 | .9213 | .7380 |
| Support 1 | 1.4365 | 1.6210 | 90.61 | 1.0249 | 1.0239 | .9203 | .7358 |
| Support 2 | 1.4334 | 1.6062 | 90.59 | 1.0244 | 1.0223 | .9173 | .7350 |
| Support 3 | 1.4263 | 1.5895 | 90.23 | 1.0219 | 1.0205 | .9169 | .7328 |
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