USD/JPY consolidating before uptrend can resume - Westpac

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

Key Quotes

“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

• 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

• 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”