FX.co ★ USD/JPY candlestick analysis for February 7, 2011

On a 4-hour graph the USD/JPY currency pair has rebounded sharply off the support level near 81.00. However, the pair is still trading on the downside after it failed to test the Fibonacci correction level 61.8.
As mentioned before, if the support level 80.93 is broken, long positions should be closed as a break of this level will cause the pair to decrease to 80.20.
Earlier on a 4-hour graph the USD/JPY pair has formed Hammer candlestick, indicating upside movement. This candlestick shows that the currency pair was decreasing for several days, but rebounded near 80.93.
This viewpoint is supported by the fact the pair has successfully broken the 23.6 Fibonacci correction level. Breakout of the resistance level 82.85 has targeted the pair to 84.50.