USDJPY: Range trade. 112.25/113.25?

Jim Langlands FX Charts

24 Hour Outlook: Neutral

Medium Term: Neutral -Look to buy dips @ 111.30/70

Preferred 24-hour Strategy: Range trade. 112.25/113.25?

US$Jpy has had a rangebound session (112.31/86), leaving the outlook unchanged

Further range trade, near current levels, seems the most likely outcome today while waiting on the BOJ Meeting, due Thursday. On the downside, the dollar has found support at the Fibo level at 112.30, but a break of 112.25 could bring about a decline to 112.00 ahead of a possible test of 111.70, 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 we do see a bounce, then, once above the session high of 112.85 minor offers will arrive at various points (113.00/25) ahead of 14 July’s high at 113.57. 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.

Author

Jim Langlands

FX Charts

Jim Langlands began his trading career in the commodities markets in London in 1976, before moving to Australia in 1979 to work as a floor trader on the Sydney Futures Exchange.

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