Morning Market Update – USD/JPY
USD/JPY is staying in consolidative trading above the 111.12 level temporary finding some support at this levels. Intraday bias the pair remains sideways first. As long as the 111.12 support level holds and a further rise is in favor. The pair’s sustained break of medium term channel resistance will argue that correction is already completed with the pair holding the levels. The pair breaking at the 111.43 level will confirm this bullish case and will target a test on the 111.62 level next. On the downside, considering bearish condition in four hour chart and the pair breaking at the 111.12 level will suggest rejection from the channel resistance and will turn bias back to the downside.
In the bigger picture, a further rise from the 111.62 level new found supports is seen as the leg of the corrective pattern. It’s unclear whether this leg has completed or not. But, the pair’s medium term outlook will be mildly bullish as long as support holds and there is prospect of breaking at the 111.43 level ahead. Meanwhile, the pair breaking at these levels will bring retest of 111.62 high levels. But even in that case, we don’t expect a break there on first attempt.
The dollar remains under pressure as the market continues to fall away. The upcoming days are looking better by recent bullish candles. Whilst any recovery in the upcoming days are beset with struggles to make any headway and will turn in effect into consolidation days. A recent candle was another consolidation day where the bulls are taking some control on the pair to make any sustainable impact, before resuming the rise overnight. The daily momentum indicators have all now taken on a corrective outlook. The pair trading with the stochastic both rises near the 15 level and the lines looks too cross higher. The pair is back into the old pivot band, so it will be interesting to see the reaction. The likelihood is that the support which has often been seen as an inflection point will now be tested. The four hourly chart show the pair’s resistance at the 111.43 level is bolstered as a key level, which was initially an area of near term overhead resistance.
The USD/JPY pair fluctuates around the support area. The pair’s stochastic still shows its positive momentum now. This might force the price to show further rise and more trading which manages to get enough a positive momentum to push the price to continue rising on the short term basis.
In general, we will continue to suggest the bullish trend in the upcoming sessions unless breaking at the 111.12 level and holding below it. The pair breaching the new resistance level at the 111.43 will push the price to head towards the 111.62 level that represents our next main target.
The pair’s expected trading range for today is between the 111.12 support and 111.62 resistance levels.
Expected trend for today: Bullish
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