Weekly
• Last Candlesticks pattern: Marubozu
• Time of formation: 14 Nov 2016
• Trend bias: Down
Daily
• Last Candlesticks pattern: Shooting star
• Time of formation: 15 Feb 2017
• Trend bias: Down
USD/JPY – 112.05
The greenback found renewed buying interest at 109.62 (just above last week’s low at 109.59) and has rallied again, dampening our bearishness and suggesting the rebound from 108.13 low is still in progress for retracement of recent decline, hence gain to previous resistance at 112.20 would be seen, however, a daily close above this level is needed to retain bullishness and bring a stronger rebound to the lower Kumo (now at 112.99), then test of 113.35-40 (50% Fibonacci retracement of 118.66-108.13), however, reckon upside would be limited to 114.00 and 114.60-65 (61.8% Fibonacci retracement) and price should falter below key resistance at 115.51, bring retreat later.
On the downside, whilst initial pullback to 111.00 and possibly 110.50-60 cannot be ruled out, reckon the Kijun-Sen (now at 110.17) would limit downside and bring another rise later. Only a daily close below said support at 109.59 would suggest top is possibly formed instead, bring weakness to 108.85-90 but break there is needed to signal the rebound from 108.13 has ended, then retest of this recent low would follow. Looking ahead, dollar needs to penetrate this level to revive bearishness and extend the erratic decline from 118.66 top to 107.85-90 (61.8% Fibonacci retracement of 101.19-118.66) and possibly 107.40-50.
Recommendation : Stand aside for this week.
On the weekly chart, as the greenback rallied after opening higher last week, suggesting low has possibly been formed at 108.13 last month and consolidation with upside bias is seen, break of 112.20 resistance would encourage for a stronger rebound to 113.35-40 (50% Fibonacci retracement of 118.66-108.13), then towards 114.60-65 (61.8% Fibonacci retracement), however, reckon upside would be limited and price should falter well below resistance at 115.51. Looking ahead, only a break of 115.51 would retain bullishness and signal the entire correction from 118.66 has ended at 108.13), bring further rise to 119.50, then 120.00-10 but resistance at 121.69 should remain intact.
On the downside, expect pullback to be limited to 110.60-70 and bring another rise later. Below the Kijun-Sen (now at 109.93) would risk test of last week’s low at 109.59 but a weekly close below previous resistance at 109.49 is needed to signal top is formed instead, bring weakness to 108.80-85, break there would bring retest of 108.13 support, once this level is penetrated, this would revive bearishness an extend recent selloff from 118.66 to 107.85-90 (61.8% Fibonacci retracement of 101.19-118.66), then towards 107.00, however, reckon downside would be limited to 106.50-55 (61.8% Fibonacci retracement of 99.01-119.52) and previous resistance at 105.53 (now support) should remain intact.
