Usd/Jpy 97.85. As per the update last week July 29th "Sell Usd/Jpy on rallies", I still think this is probably a reasonable idea.
It has not really done a great deal at this stage against the US$, currently sitting only 40 points lower than when we first raised the possibility of it being a decent trade. Most of the action has taken place in the crosses, particularly against the Aud and Gbp, but I suspect that further downside pressure may come through, possibly as early as Friday if the NFP does not match expectations which would mean little likelihood of QE tapering any time soon, putting further pressure on the dollar.
We are currently holding on to technical support at 97.55 ( the base of the daily Cloud and 50% pivot of 93.78/101.52) and while above here we may continue to chop around for a while withing the cloud, the top of which is at 98.75. A break would see a run lower towards Fibo support at 97.38 (23.6% of 77.10/103.73) and a break of the rising trend support, now at 97.10, would see a run towards the weekly Kijun Sen at 96.88. If we go under this, we could see a greater acceleration to the downside, as I cannot see a great deal to hold the dollar up, until the rising trend support, currently at 94.40. It is too early to think of this, but is worth watching, and as we said on the weekend, it could be that the dollar is in the process of building a major head/shoulder top with a neckline at around 94.50, a break of which would target somewhere close to 85.00.
On the topside, today's 98.50 top (100 DMA) should be strong resistance but if wrong, look for a run towards 98.75 (Cloud top - see chart below) and possibly to 99.00. The descending trend resistance is now at 100.00 and above here I would have to admit defeat and would have a SL above last weeks high of 100.44.
Until then looking for rallies to sell into still seems to be the plan.
USDJPY: 4 Hour
USDJPY: Daily
USDJPY: Daily Ichimoku
It has not really done a great deal at this stage against the US$, currently sitting only 40 points lower than when we first raised the possibility of it being a decent trade. Most of the action has taken place in the crosses, particularly against the Aud and Gbp, but I suspect that further downside pressure may come through, possibly as early as Friday if the NFP does not match expectations which would mean little likelihood of QE tapering any time soon, putting further pressure on the dollar.
We are currently holding on to technical support at 97.55 ( the base of the daily Cloud and 50% pivot of 93.78/101.52) and while above here we may continue to chop around for a while withing the cloud, the top of which is at 98.75. A break would see a run lower towards Fibo support at 97.38 (23.6% of 77.10/103.73) and a break of the rising trend support, now at 97.10, would see a run towards the weekly Kijun Sen at 96.88. If we go under this, we could see a greater acceleration to the downside, as I cannot see a great deal to hold the dollar up, until the rising trend support, currently at 94.40. It is too early to think of this, but is worth watching, and as we said on the weekend, it could be that the dollar is in the process of building a major head/shoulder top with a neckline at around 94.50, a break of which would target somewhere close to 85.00.
On the topside, today's 98.50 top (100 DMA) should be strong resistance but if wrong, look for a run towards 98.75 (Cloud top - see chart below) and possibly to 99.00. The descending trend resistance is now at 100.00 and above here I would have to admit defeat and would have a SL above last weeks high of 100.44.
Until then looking for rallies to sell into still seems to be the plan.
USDJPY: 4 Hour
USDJPY: Daily
USDJPY: Daily Ichimoku
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