USDJPY Fibonacci Analysis

The dollar yen pair has been in a nice long term down trend and we are now seeing what could be a corrective move higher. The swing points provide good Fib reference areas and this post focuses on potential short opportunities from fib retrace areas.

I see three potential Fibonacci resistance levels to keep an eye on going into the new week. I will be looking for price action in these areas as covered on my Forex blog around these areas.

* The 38.2 Fibonacci intersection with the trendline shown may provide a potential short trade, with a tight stop, if the market guns for all of the stops above the recent range and subsequently move lower.
* The second highest area shows a fib confluence with horizontal resistance looking promising for some kind of reaction. I will be mindful of the trendline being broken if we get there though and will also observe how well price respects the trend line. This is my favored area, at present, for a potential reaction trade lower.
* The highest level I have highlighted is a 38 fib confluence with the swing high. This is a major swing point (this is a weekly chart after all) and quite a way of yet. I will keep my eye on this point as the 38.2 fib is from the ultimate high from June 2007.

I will only enter at any of these areas if high quality reversal signals are shown.