USD/JPY: Uptrend off 2016’s multi-quarter base has resumed and should retest Dec’16 highs - Westpac

Mid-May’s fall below 112.00-15 created a near term pivot area and a close above 112.15 would flip intra-month bias for a squeeze to the 114.65-115.00 area, suggests Tim Riddell, Research Analyst at Westpac.

Key Quotes

“Daily momentum turned decidedly USD positive in mid-June, supporting potential for more substantial gains. A close below 110.00 is needed to alter near-term bias”

“Weekly

• Weekly momentum remains firmly USD supportive with a bias for further rebounds towards the longer term pivot area between 114.65-115.00
• Consolidation patterns could still be in place (risking a spike to form a base in the 106.40-108.75 area), but bias is shifting towards a dynamic rally towards 118.65”

“Monthly

• Monthly momentum is relatively supportive, but remains 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 full retest of 125-126 (possibly extending to 135-140 area)”