USD/JPY Candlesticks and Ichimoku Analysis
|
Last Candlesticks pattern |
Time of formation |
Trend bias |
| Weekly |
Evening star |
17 Aug 2008 |
Bearish |
| Daily |
Hammer |
21 Jan 2009 |
Sideways |
Although the greenback retreated after early rise to 99.69, the pair found good support around 95.67 (exactly as we indicated in our previous update) last Thursday and has rebounded from there since. After the double bottom formation at 87.10 low, we still expect the 94.65 level (resistance turned support) to contain dollar's downside and mild upside bias remains for gain to 100.00-100.58 resistance area and above there would signal retracement of the medium term decline is taking place for move towards 102.20 (the projected target of the double bottom formation), however, further sharp gain above 104.00 is unlikely and selling pressure shall increase near the Ichimoku cloud (currently located slightly above 105.00). Looking ahead, only if the pair can penetrate the Ichimoku Kumo (105.00-107.00) would bring a major reversal for correction of medium term intermediate decline from 124.14 towards 110.67.
On the downside, if price drops below 95.67 support, this would signal a temporary top has been formed at 99.69 but only a clear break of 94.65 support would indicate the first leg of correction from 87.10 has ended there, then fall to 93.40 (currently level of Tenkan-Sen) would follow, however, downside is likely to be limited to 92.40/50 and renewed buying interest shall emerge well above 90.00 level, then dollar should stage another strong rebound probably in Q2.
On the daily chart, despite falling to 95.67 (just exceeded 38.2% pullback of rise from 89.82 to 99.69 at 95.92) , the subsequent rebound formed a 'doji' like candlestick pattern and the white candle on Friday suggest correction from 99.69 has possibly ended there, however, initial strong resistance is still seen at 99.10-20 area and the greenback needs to break this level to confirm recent rise from 87.10 has resumed for another test of 99.69, then 100.00 but a daily close above this level is needed to retain our bullish view for headway to 100.56 resistance and later towards aforementioned 102.20.
On the downside, loss of said 95.67 support would defer this bullish view but only below 94.65 support(previous resistance and also just below current level of Kijun-Sen) would indicate the upmove from 87.10 has ended at 99.69 and the pair might slip to 92.04-41 (upprt limit of Ichimoku cloud and previous resistance) but support at 89.82-90.00 should remain intact.
|
