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 – 112.84
The greenback has continued trading with a firm undertone, suggesting the rebound from 108.82 low is still in progress, hence upside risk remains for marginal gain from there, however, loss of upward momentum should prevent sharp move beyond 113.00 and bring retreat later, below 111.73 support (Friday’s low) would suggest top is possibly formed, bring weakness towards 110.95 support but a daily close below the Kijun-Sen (now at 110.88) is needed to add credence to this view, bring subsequent weakness to 110.65 and later towards 110.00.
On the upside, above 113.10-20 would signals the fall from 114.39 has ended at 108.82 and upside risk remains for the rebound from there to extend further gain to 113.50 and later towards 114.00. Having said that, as broad outlook remains consolidative, upside should be limited and said resistance at 114.39 should hold. Only a break above said resistance at 114.39 would shift risk to upside and signal another leg of rise from 108.13 low is underway for headway to 114.60-65, then towards resistance at 115.51.
Recommendation : Hold short enter at 112.25 for 110.25 with stop above 113.25.
On the weekly chart, last week’s rise formed another white candlestick (3rd in a row), suggesting the rebound from 108.82 is still in progress and further gain from here cannot be rule out, however, as broad outlook remains consolidative, reckon upside would be limited to 113.85 and resistance at 114.39 should hold. Only a break above resistance at 114.39 would signal another leg of rebound from 108.13 low is underway for test of resistance at 115.51 but a weekly close above there is needed to signal the fall from 118.66 top has ended at 108.13, then headway to 116.00-10 would follow but resistance at 117.53 should hold from here.
On the downside, whilst pullback to 111.90-95 cannot be ruled out, support at 110.95 should hold and bring another rebound. Below 110.95 would suggest the rebound from 108.82 has ended, bring weakness to 110.00 and possibly towards the lower Kumo (now at 109.51) but support at 108.82 should remain intact, bring further consolidation. Below 108.82 would bring retest of 108.13 but break there is needed to retain bearishness and signal the fall from 118.66 top has resumed and extend decline towards previous resistance at 107.49.
