USD / JPY – Defying All the Odds to Stay Above the Key 78 Level

The last six months or so have seen the USD/JPY slowly declining from its March highs around 84. In the last few months it has been forming a descending triangle with a solid support level around the 78 level. Throughout the last month, this has consistently supported the Yen and temporarily halted its steady decline. A few weeks ago, the Yen traded below the 78 although very quickly was bought at those levels as it surged back above 78 up to 79.  In falling down through the 78 level, it reached its lowest level since 1 June.

During this descending triangle over the last few months, the peaks have become lower as sellers are enthusiastic to sell at lower prices than previously placing downward pressure on the Yen.  Over the last couple of weeks, the Yen has rolled over and been sold off as it has again fallen down through the key 78 level.  Between 77.50 and 78, a flurry of buyers have entered the market and again moved it back above 78.  The Yen continues to defy the odds as the intense selling pressure has not been enough to keep it below 78 as yet.   When will the dam wall eventually break? (Daily chart below)

USD/JPY Technical

• During the early hours of the Asian trading session on Wednesday, the USD/JPY has risen ever so slightly from the 78 level.
• How many more rallies does the Yen have left before most likely breaking through the support level at 78?
• The 78.00 level and the area just below conitnues to offer strong support
• Current range: Staying just above 78.00, but for how long?  Will the Yen break down from its descending triangle?

Further levels in both directions:

• Below: 78.00, 77.00 and 76.00.
• Above: 79.00, 80.00, and 82.00.

• Should the USD/JPY be able to break down through the support level around 78, then a return back to the congestion level at 76 is possible.