USDJPY – Initial signals of recovery losing traction; n/t price action is holding between daily cloud top and Kijun-sen

Slobodan Drvenica Windsor Brokers

USDJPY

Extension of strong bounce from correction low at 112.55 showed initial signs of stall, after daily Kijun-sen capped recovery at 115.60 (50% of 118.59/112.55 pullback) and daily candle with long upper shadow was left on Thursday. However, bullishly aligned near-term technicals favor further upside, as thickening daily Ichimoku cloud (cloud top is currently at 114.10) is continuing to underpin. Consolidation between daily cloud top and Kijun-sen line is expected to precede fresh attempts higher, with break above 115.57 pivot, to trigger fresh recovery towards 116.28 (Fibo 61.8%) and 116.85 (11 Jan lower top) in extension. Conversely, strong bearish signals could be expected on penetration into daily cloud that would trigger fresh weakness towards 113.71 (Fibo 61.8% of 112.55/115.60 recovery leg) and re-expose 112.55 handle on firm break lower.

Res: 115.11; 115.60; 116.28; 116.85

Sup: 114.40; 114.10; 113.71; 113.17

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

1. R3 116.85
2. R2 116.24
3. R1 115.52
PP 114.91
1. S1 114.19
2. S2 113.58
3. S3 112.86

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.

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