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 – 110.65
The greenback resumed recent decline after brief bounce to 110.98 and our short position entered at 112.00 met indicated downside target at 110.00 (with 200 points profit) as the pair fell to as low as 109.85 on Friday, having said that, as dollar found good support there and has rebounded in part due the broad-based strength in the greenback, suggesting minor low has been formed and consolidation above this level is in store, hence initial upside risk is for test of 111.03-05 (current level of the Tenkan-Sen and Friday’s high), however, a daily close above there is needed to bring retracement of recent decline to 111.70-75 but the Kijun-Sen (now at 112.18) should hold and bring another decline later.
On the downside, expect pullback to be limited to 110.30-40 and bring such a rebound. Below said support at 109.85 would signal the decline from 114.50 is still in progress and may extend weakness to 109.40, having said that, as broad outlook remains consolidative, reckon downside would be limited to previous support at 108.82 and the part shall stay above previous chart support at 108.13, bring another rebound later.
Recommendation : Short entered at 112.00 met indicated downside target at 110.00 with 200 points profit and would sell again at 112.00 for 110.00 with stop above 113.00.
On the weekly chart, despite last week’s anticipated fall to 109.85, the subsequent rebound from there formed a doji star and if this week ends with a white candlestick, this would signal the retreat from 114.50 has ended, then test of the Kijun-Sen (now at 111.82) and the upper Kumo (now at 112.11) would be seen, however, still reckon upside would be limited to 112.90-00 and 113.55-60 should hold, price should falter well below resistance at 114.50, bring another decline later.
On the downside, below said support at 109.85 would signal the fall from 114.50 is still in progress, then further weakness to 109.40 would follow, however, reckon 108.82-84 (previous support as well as current level of the lower Kumo) would limit downside and price should stay well above support at 108.13, bring recovery later. In the event dollar drops below support at 108.13, this would signal early fall from 118.66 top has resumed and may extend weakness to 117.40-50, then 117.00 but downside should be limited to 106.50-55 (61.8% Fibonacci retracement of 99.01-118.66), bring rebound later.
