Daily Pivots: (S1) 109.79; (P) 110.56; (R1) 111.59; More…

Intraday bias in USD/JPY remains on the upside for the moment. Fall from 114.49 should have completed at 107.31 already. Further rally would be seen for medium term channel resistance (now at 112.91). Sustained break there will argue that whole correction from 118.65 has completed too. In that case, further rise should be seen to 114.49 resistance for confirmation. On the downside, below 109.54 minor support will turn bias back to the downside for 107.31 instead.

In the bigger picture, rise from 98.97 (2016 low) is seen as the second leg of the corrective pattern from 125.85 (2015 high). It’s unclear whether this this second leg has completed at 118.65 or not. But medium term outlook will be mildly bearish as long as 114.49 resistance holds. And, there is prospect of breaking 98.97 ahead. Meanwhile, break of 114.49 will bring retest of 125.85 high. But even in that case, we don’t expect a break there on first attempt.

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