USD/JPY Candlesticks and Ichimoku Analysis

Weekly

    •    Last Candlesticks pattern: Dark cloud cover
    •    Time of formation: 10 Jul 2017
    •    Trend bias: Down

Daily

    •    Last Candlesticks pattern: Evening doji
    •    Time of formation: 7 Aug 2017
    •    Trend bias: Down

USD/JPY – 112.87

Although the greenback retreated on Friday to 111.41, as dollar found decent demand there and has rallied (the pair opened higher this week), suggesting the rise from 110.84 is still in progress, hence mild upside bias is for this move to extend further gain to 113.30-35, then test of resistance at 113.91, however, a daily close above this level is needed to retain bullishness and confirm the fall from 114.74 has ended, bring further gain to 114.40-50 first. 

On the downside, whilst pullback to 112.40-50 cannot be ruled out, reckon the Tenkan-Sen (now at 111.96) would limit downside and bring another rise later. Only a drop below strong support at 111.37-41 would abort and suggest the rebound from 110.84 has ended instead, bring retest this level. In the unlikely event that dollar drops below 110.84, this would shift risk back to downside for the fall from 114.74 top to extend weakness to 110.00, then 109.50-60 but price should stay above 109.00-10.

Recommendation : Exit short entered at 112.90 and buy at 112.10 for 114.10 with stop below 111.30

On the weekly chart, this week’s gap-up opening suggests low has possibly been formed at 110.84 last week and consolidation with mild upside bias is seen for gain to resistance at 113.91, however, a sustained breach above this level is needed to retain bullishness and signal the pullback from 114.74 has ended, bring retest of this level. Once this resistance is penetrated, this would signal the rise from 107.32 low has resumed for headway to 115.51-62 resistance area, break there would add credence to our view that early erratic decline from 118.66 has ended at 107.32, then upmove to 116.50-60 and possibly 117.00-10 would follow.

On the downside, expect pullback to be limited to 112.00-10 and bring another rebound later to aforesaid upside targets. Below said support at 111.41 would abort and suggest the rebound from 110.84 has ended instead, bring retest of this level, break there would extend the fall from 114.74 to 110.00-10, then 109.50-60 but reckon downside would be limited to 109.00 and 108.10-15 should hold from her, bring rebound later.