| 24 Hour Outlook: Prefer to sell rallies | Medium Term: Neutral -Look to buy dips @ 111.30/70 |
Preferred 24-hour Strategy: Mildly Bearish. Looking to sell towards/above 113.00 with a SL placed above 113.60.
US$Jpy turned sharply lower on Friday, and after an early bid tone that saw the pair reach 113.57 it fell heavily following the US data to finish at 112.50, just above the lows of 112.25..
On the downside, while the hourlies are becoming oversold, the 4 hour/daily momentum indicators hint at lower levels ahead, and a break of 112.25 could bring about a decline to 112.00 ahead of a possible test of levels sub 111.70, but which should act as strong support if we get there. Below that, as we said before, the monthly cloud top is rising sharply and currently lies at 111.30, which should also see strong bids, but in the next 2 months will climb to 112.75 and then to 114.20 (Sept). We have not had a monthly close below the cloud top since Oct 2013.
On the topside, the daily charts look as though they are topping out, but if the hourlies do allow a bounce, then minor offers will arrive at various points ahead of Friday’s high. This will again be strong resistance if/when we get there, but above which could revisit 113.80 ahead of 114.00. I don’t think we head up here for a while, but if wrong we could head back to the 114.49 trend high and further out, if we can take out the resistance seen at the 11 July high of 114.49, there is little to stand in the way of an attack on 115.00 and eventually higher.
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