Trade view /
14 July 2016 at 7:59 GMT
Dip buying is in focus for USDJPY and this sequence for trading looks likely to continue.
Monthly – Dip buying is close to strong support at 101.67-100.57. This is the 50% pullback from 75.30-125.85 and previous swing low. There is a possible pincer bottom if we close around current levels.
A strong rejection of price here could form a right shoulder of a bullish Head-and-Shoulders pattern and project the pair aggressively higher over the long term, though it's far too early to tell.
Source: Saxo Bank
Weekly – The chart highlights strong buying after completing the five-wave bearish Elliott Wave formation. The main question here is whether the move up is corrective or impulsive. The strength and speed of the rally would suggest an impulsive move and the start of a new bull trend.
Daily – Probably the most important factor in this positive outlook is the daily chart. A 261.8% extension will take the pair to previous resistance at 110.77. We are close to the 161.8% extension at 106.20 and an area that has been pivotal, so it's looking like a good intraday target. There is nothing to suggest that this bull run is coming to an end.
Management and risk description
buying close to 105.00.
intraday 106.15. Medium term 110.70.
intraday to medium term.
— Edited by D. Deacon
Non-independent investment research disclaimer applies. Read more