USD/JPY Forecast: Eyes 101.19 - starting point of Trump rally

Omkar Godbole FXStreet Contributor

The USD/JPY pair dipped below the major support level of 105.00 in Asia, opening doors for a sell-off all the way down to 101.19 - November 2016 low (starting point of Trump rally).

Weekly chart

Having failed to beat the long-term descending trendline resistance in Q4, 2017, the pair breached the inverted flag/bear flag-like pattern in mid-Feb. In the subsequent weeks, bulls tried to regain control, occasionally pushing the spot above 107.00. However, trade war fears and the turmoil in Washington kept the bears (JPY bulls ) in the game.

The drop to 104.63 (the lowest level since November 2016) seen today signals a convincing downside break of the bear flag (bearish continuation pattern), meaning the sell-off from the January 2017 high of 118.61 has resumed and the spot could drop to 95.70 - target as per the measured height method. The target may be somewhat far fetched, but one thing is quite clear - the bear grip has strengthened and the spot will likely drop to 101.19 in the next few weeks.

On the higher side, 106.20 - (channel support will not act as a stiff resistance) is the level to watch out for. Only a convincing move above the said level would abort the bearish view. That said, the odds of a big rally will likely remain low as long as the 5-week moving average (MA) and the 10-week MA is trending lower in favor of the bears.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD looks weaker near 1.3500

GBP/USD adds to Monday’s pessimism and puts the 1.3500 support to the test on Tuesday. Cable’s marked pullback comes in response to extra gains in the Greenback while disappointing UK jobs data also collaborate with the offered bias around the British Pound.

Gold loses further momentum, approaches $4,800

Gold recedes to fresh two-week troughs around the $4,800 region per troy ounce on Tuesday. The precious metal builds on Monday’s downtick following a marked rebound in the US Dollar and mixed US Treasury yields across the board.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.