USDJPY Outlook | Written by ActionForex.com
USDJPY's sharp fall and break of 82.78 support last week indicates that rebound from 80.29 should be completed at 84.39 already. Initial bias is on the downside this week for 61.8% retracement of 80.29 to 84.39 at 81.85 first. Break will target a test on 80 psychological level again. On the upside, above 83.02 minor resistance will turn intraday bias neutral and bring recovery. But upside should be limited well below 84.39 and bring another fall.
In the bigger picture, with 85.92 cluster resistance (38.2% retracement of 94.97 to 80.29 at 85.89) intact, there is no confirmation of reversal yet and the longer term down trend in USD/JPY is possibly still in progress for another test on 79.75 (1995 low). Again, note that downside momentum is clearly diminishing with bullish convergence condition in weekly MACD. We'll continue to focus on reversal signal on next fall.
In the long term picture, there is no indication of trend reversal yet and USD/JPY's long term down trend could still extend further to 1995 low of 79.75. We'd anticipate some strong support from 79.75 initially to bring rebound. Focus will be on whether 79.75 would hold or USD/JPY is indeed resuming the multi decade decline that started back in the 80's.
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