US$Jpy initially tried the upside in reaching 106.70 on Monday before drifting lower to 107.00 and ending the day at 107.10, right on the Daily cloud base/Daily Tenkan
1 hour/4 hour indicators: Turning lower.
Daily Indicators: Turning higher
Weekly Indicators: Turning higher
Preferred Strategy: The daily momentum indicators retain a constructive bias and the weeklies are also now turning higher so sentiment does look to be improving for US$Jpy despite the fact that the short term charts look a bit heavy, so a fairly neutral stance is required, but technically, buying dips still seems to be the plan.
On the topside, back above minor resistance at 107.30 would find offers at 107.60 (Session high), at 107.75 and then again at the mid-February high at 107.90. Above here, 108.10 would then be a target, beyond which could see a move to 108.45/50.
On the downside, buyers will be seen at current levels ahead of good support at 106.55/65, below which could see a reverse towards 106.20, 106.00, and possibly towards the 3 April low of 105.68 although this seems unlikely right now.
As before, if stocks turn sharply lower again, probably taking US$Jpy along for the ride despite the currently positive medium term indicators, a move back below the 200 MMA (105.60) would open the way to 105.30, a break of which would allow a return to 104.60. Below that, there is little to support the dollar until 103.50 – This currently looks well beyond the horizon, and overall, while the dailies remain positive, I prefer to be trading from the long side and looking to buy dips.
Buy US$Jpy @ 106.70. SL @ 106.30, TP @ 107.70
Economic data highlights will include:
Industrial Production, Capacity Utilisation
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