Morning Market Updates – USD/JPY

The USD/JPY pair will settle at the support area and continues an upside momentum. The pair is still gaining strength with the 112.666 support level and a further rise is expected. A sustained break of medium term channel resistance will argue that correction is already completed with support holding the area. Breaking of the 113.057 level will confirm this bullish case and target a test on the 113.688 next. On the downside, a break of the 112.666 level will suggest rejection from the channel resistance and turn bias back to the downside.

In the bigger picture, a further rise from the 112.666 level is seen as the second leg of the corrective pattern from the support levels. It’s unclear whether this second leg has completed at these levels or not. But medium term outlook will be mildly bullish as long as support holds and there is prospect of breaking ahead. Meanwhile, a break of the 113.057 will bring retest of 113.688 high levels.

The dollar remains neutral as the market continues to fall away. The upcoming days are characterized by strong bull candles. The pair whilst any recovery up days is beset with struggles to make any headway and will turn in effect into consolidation days. A current candle was another consolidation day where the bulls rise to make some impact, before once more resuming the rise earlier in the day. The daily momentum indicators have all now taken on a corrective outlook, with the stochastic both rising above the 20 level. The pair is now 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 shows the resistance at the 113.057 level is bolstered now as a key level, with initially an area of near term overhead supply.

The USD/JPY pair has bounced bullishly after the 112.666 level formed a solid support against the price recent negative attempts and stuck between the mentioned support which represents correction levels consecutively. This makes us suggest witnessing sideways trading between these levels until the price manages to breach one of them.

Noting that breaking the mentioned resistance will push the price to resume the bullish trend and its main targets begin at the 113.057 and extend to 113.688 levels. While breaching the resistance represents the key to extend the pair’s gains to reach the previously recorded top as a next main station.

The pair’s expected trading range for today is between the 112.666 support and 113.688 resistance levels.

Expected trend for today: Bullish
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