A weekly close below that mark will be however a different story, with further downward correction expected towards 99.50/70 price zone, 61.8% retracement of the same rally and past April highs. Daily chart shows indicators heading lower, finally correcting the overbought readings seen for the past two weeks, which supports some probable correction ahead. However, even if the 99.50/70 area is reached, the long term perspective won’t change as a quick recovery should follow on approaches to the 100.00 level.
But the upside seems now not that easy after 8 months of straight rises and 103.60 has proved strong. Investors will need a high dose of convincement to continue buying at current levels, either further BOJ easing or signs of dollar strength, neither quite clear at the time being. Steady gains above 103.60 however, should lead to an extension towards 105.00, this upcoming week, as there’s not much in the middle.
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