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 – 110.85
The greenback only recovered to 112.42 late last week before meeting renewed selling interest and the subsequent selloff adds credence to our bearish view that the rebound from 108.82 has ended at 114.50 and the decline from this top is still in progress for further weakness to 110.00, having said that, as broad outlook remains consolidative, reckon downside would be limited to 109.40 and said support at 108.82 should remain intact.
On the upside, whilst initial recovery to 111.40-50 is likely, reckon upside would be limited to resistance at 112.08 and bring another decline later. A daily close above said resistance at 112.42 would defer and suggest low is possibly formed, bring test of the Kijun-Sen (now at 112.60), break there would suggest first leg of decline from 114.50 has ended, bring a stronger rebound to 113,00, however, still reckon upside would be limited to 113.55-60 and 114.00 should hold, bring another decline later.
Recommendation : Sell again at 112.00 for 110.00 with stop above 113.00.
On the weekly chart, as dollar’s retreat from 114.50 has kept price under near term pressure, adding credence to our view that top is possibly formed at 114.50 and consolidation with downside bias remains for weakness to the lower Kumo (now at 110.25), below there would extend fall to 109.40-50, however, reckon indicated support at 108.82 would limit downside and price should stay well above support at 108.13, bring recovery later.
On the upside, although recovery to the Tenkan-Sen (now at 111.66) cannot be ruled out, reckon upside would be limited to 112.05-10 and bring another decline later to aforesaid downside targets. Above 112.42 would bring a strong recovery to 113.00, however, reckon upside would be limited to 113.55-60 and price should falter well below said resistance at 114.50. Only a break above 114.50 would signal the rebound from 108.13 is still in progress for gain towards 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.
