USD/JPY Candlesticks and Ichimoku Analysis

Weekly

• Last Candlesticks pattern: Marubozu

• Time of formation: 14 Nov 2016

• Trend bias: Down

Daily

• Last Candlesticks pattern: Shooting star

• Time of formation: 15 Feb 2017

• Trend bias: Down

USD/JPY – 112.09

Although the greenback surged to as high as 114.50 early last week, lack of follow through buying on break of previous resistance at 114.37 and the subsequent sharp retreat suggest top has been formed there and consolidation with downside bias is seen for test of the Kijun-Sen (now at 111.66), a daily close below there would add credence to this view and extend weakness to the lower Kumo (now at 111.08), then towards 110.70. Having said that, as broad outlook remains consolidative, reckon downside would be limited to 110.00 and 109.40 support should remain intact.

On the upside, whilst initial recovery to 112.80 is likely, reckon upside would be limited to the Tenkan-Sen (now at 113.09) and bring another decline later. Above 113.55-60 would defer and risk a stronger rebound to 114.00, however, price should falter below said resistance at 114.50 and bring another decline later. Above 114.50 would extend the rebound from 108.13 to 114.65, then towards resistance at 115.51 which is likely to hold from here.

Recommendation: Sell again at 112.70 for 110.70 with stop above 113.70.

On the weekly chart, although dollar rose marginally to 114.50 last week, the subsequent retreat formed a black candlestick, suggesting top is possibly formed there and consolidation with downside bias is seen for weakness to the Tenkan-Sen (now at 111.66), below there would extend fall to 111.00, then test of 110.70, however, reckon the lower Kumo (now at 110.35) would limit downside and  price should stay well above support at 108.82, bring recovery later.

On the upside, although recovery to 112.70 cannot be ruled out, reckon upside would be limited to 113.00 and bring another decline later to aforesaid downside targets. Above 113.55-60 would risk another test of said resistance at 114.50 but only break there would signal the rebound from 108.13 is still in progress for gain towards resistance at 115.51 but a weekly close above there is needed to signal the fall from 118.66 top has ended at 108.13, then headway to 116.00-10 would follow but resistance at 117.53 should hold from here.

Interested in USD/JPY technicals? Check out the key levels