Morning Market Update – USD/JPY

With the 111.083 minor resistance intact, the intraday bias in USD/JPY remains mildly on the downside for 110.381 support. A break here will resume the fall from 110.381 to 110.119 and below. Note again that a decline from 110.381 is seen as a continuation of the downside. In that bearish case, we’ll look for a bottoming signal again at 110.381.

In the bigger picture, price actions from resistance high are seen as a corrective pattern. It’s certain that the pair has completed some correction, which suggests for the case of another fall, the downside should be contained by 110.119. Overall, there may be some correction from 110.119 is still expected to resume later after the correction from completes.

The dollar remains under pressure as the market continues to fall away. The down-days are characterized by strong bear candles, whilst any recovery up-days are beset with struggles to make any headway and in turn effect into consolidation days. The earlier candle was another indication where the bulls failed to make any sustainable impact, before once more resuming the decline overnight.

The daily momentum indicators have all now taken on a corrective outlook, with Stochastic falling below 50. The pair is now back into the old pivot band 110.98, 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 and look to break below it. The four hourly chart shows the resistance at 111.083 is bolstered now as a key level, with 110.119 initially an area of near term overhead supply.

The USDJPY pair bounced downwards sharply after approaching from 111.083 level, starting earlier today with more decline to break 110.98 level and attempts to hold below it, which supports the continuation of our bearish overview efficiently in the upcoming period, opening the way to head towards 110.381that represents the next main target.

Therefore, the bearish trend will remain dominant for today supported by the negative pressure formed by the EMA50, noting that breaching 111.083 followed by 110.381 levels will stop the expected decline and lead the price to return to the bullish trend on the short term basis.

Expected trading range for today is between 110.624 support and 112.146 resistance.

Expected trend for today: Bearish
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