USDJPY – close below weekly cloud to confirm bearish continuation
The pair remains firmly in red and extends strong fall of the previous day through key supports at 108.11 (2017 low, posted on 17 Apr) and round-figure 108.00.
Risk aversion over North Korea tensions continues to heavily weigh on the pair, with rising fears of another incident during the weekend when North Korea will be celebrating National Day.
Such scenario could further accelerate yen’s bulls as break below 108 handle also triggered a number of stops parked below.
Bear-leg from 110.66 (31 Aug lower top) could extend to 106.51 (Fibo 61.8% of 98.99/118.66 ascend) as bears see no obstacles en-route after 108.11 pivot was taken out.
The pair is on track for strong bearish weekly close (the biggest one-week fall since early April), with close below 108.83 (weekly cloud base which was cracked several times but without clear break) to confirm bearish continuation.
Corrective action could be anticipated in the near-term as slow stochastic entered oversold territory, with weekly cloud base now offering strong resistance and expected to cap.
Res: 108.11; 108.48; 108.83; 109.26
Sup: 107.34; 107.00; 106.77; 106.51
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
