Tim Riddell, Research Analyst at Westpac explains that momentum turned against USD after USD/JPY peaking in early-July at 114.50 and a slide into the pivotal 111.00-112.30 range is likely before a directional move can be called
“Although longer term bias is for an eventual push to retest the 118.50 area, daily patterns are highly dependent upon price action into month end”
- Weekly momentum risks faltering at neutral levels after USD stalled at 114.50. USD is now at risk of downside corrections before the favoured uptrend resumes
- Potential for a flush (affirming base between 106.40-108.75) remains. A close above 113.50 is needed for a return to a more dynamic uptrend towards 118.65”
- Monthly momentum continues to have a supportive bias, but it is at decidedly neutral levels and so a more prolonged and frustrating consolidation could develop
- Despite this risk of a prolonged consolidation, bias remains for the uptrend to resume and trigger a push through 118.50 for full retest of 125-126”
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