Weekly
- Last Candlesticks pattern: Long white candlestick
- Time of formation: 14 Nov 2016
- Trend bias: Near term up
Daily
- Last Candlesticks pattern: Hammer
- Time of formation: 09 Nov 2016
- Trend bias: Down
USD/JPY – 118.06
Although the greenback slipped last week to as low as 116.04, dollar found renewed buying interest there and has staged a strong rebound, suggesting the pullback from last month’s high of 118.66 has possibly ended there and consolidation with upside bias is seen for test of 117.82 resistance, however, a daily close above there is needed to retain bullishness and bring retest of 118.66. Looking ahead, once this level is penetrated, this would extend recent upmove from 99.01 low for further gain to 119.50-55 (76.4% retracement of 125.86-99.01) and then psychological level at 120.00.
On the downside, expect pullback to be limited to 117.40-50 and support at 117.20-21 should contain downside, bring another rise later. Only below 116.42 would risk test of said support at 116.04 but break there is needed to signal a temporary top is formed, bring retracement of recent upmove to the Kijun-Sen (now at 115.16) and then 114.75-80, however, 114.00-10 would remain intact.
Recommendation : Buy at 117.50 for 119.50 with stop below 116.50.
On the weekly chart, as the greenback has maintained a firm undertone after recent rally in Q4 2016, suggesting the upmove from 99.01 low is still in progress and above 118.66 (last month’s high) may extend further gain to 119.50-55 (76.4% retracement of 125.86-99.01), then 120.00 psychological level but reckon previous chart resistance at 121.69 should hold from here, bring retreat later.
On the downside, although initial pullback to 117.40-50 cannot be ruled out, reckon downside would be limited to 117.00 and bring another rise. Only below support at 116.04 would defer and prolong consolidation below said recent high at 118.66, bring retracement to 114.70-75 and then 114.00 but reckon downside would be limited to 112.85-90, bring another upmove later.
