Best Financial Markets Analysis Article Last week important supports in USD/JPY were violated, swinging the directional bias in favour of shorter term bears. Now that the dust has settled we take a look at the current technical position of this market.

The FX Trader’s view

WEEKLY CHART:

This chart previously found strong resistance from the 61.8% recovery level.

Latest weakness, reinforced by the support line break, at least postpones any attempt higher –we currently don’t know whether this is a temporary pullback phase or if the 87.11 lows are at serious risk.

DAILY CHART:

We must respect the bears after last week’s break below key 94.00/93.82 support.

But we are reluctant to give a name to the apparent top formation as its importance is uncertain.

In Tue’s FX Trading Guide we noted s/term support could be seen from the bear channel base projection so this week’s rebound is no surprise.

It enabled us to establish theoretical shorts in a suggested 93.80/94.00 area, initial stops at 95.25 and targeting 92.00 for partial profits.

First resistance is now offered by the 94.86 23-Jun low and ideally

this will hold. A stronger recovery through 96.99 01-Jul high would negate the bear view.
Meanwhile, channel base support notwithstanding, the bears have a sporting chance of seeing a move lower to the 90.50 76.4% area. There are also two Fibo projections quite near to this, although we reserve judgment as to how effective these are in USD/JPY.

Philip Allwright
Mark Sturdy

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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