USD/JPY Extends Bearish Move Towards 101.20
ICN.com | Jul 21, 2014 05:02AM ET
The pair failed again to achieve a daily closing below 1.3520 as showing on graph and started this week's trading slightly to the upside, accompanied by the positive expectations showing on Stochastic. Meanwhile, Linear Regression Indicators are still showing a negative bias and MACD is negative.
Therefore, we will benefit from any upside move this week to sell the pair again, as levels close to Linear Regression Indicators 1.3575 - 1.3590 could be good with appropriate Risk/Reward Ratios to sell the pair again. A break below 1.3520 triggers a downside move targeting 1.3375. Of note, breaching 1.3625 weakens the downside move, while breaching 1.3665 gets the pair into a bullish wave to try breaching 1.3705.
The pair dropped sharply last Friday and touched levels around 113% correction at 1.7035 before rebounding to the upside and close last week's trading session above 1.7080 represented in 127.2% correction. In fact, the abovementioned weakens the possible positivity without cancelling it, whereas Linear Regression Indicators are showing a negative crossover, while MACD is still moving in a bearish bias.
Because AROON Indicator is showing weakness in the bearish strength represented in a drop in AROON negative line, we should wait to confirm breaking 1.7080 again, or benefit from any upside move to sell the pair again at appropriate Risk/Reward Ratios. Of note, breaching 1.7185 triggers a bullish wave and fails the downside move, as the pair is still trading within the ascending channel showing on graph.
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The USD/JPY extended the bearish move towards 101.20 support level, however it found support on friday, and moved slightly higher. The price remains above that key support among 101.20-100.75 major area, and that keeps the overall long term bullish trend intact, where we expect the support to hold and price to regain the upside and move within the overall sideways range. Note that a break below 100.75 will signal a bearish reversal and extend the bearish move significantly.
The price is attempting to resume the bullish bias after the earlier bullish breakout above 0.8960 reissuance level, where price settles above the 200-days long term moving average as well, and that support the bullish continuation scenario. We expect the bullish bias to resume and price to continue higher towards 0.9035 major high and resistance level.
USD/CAD is fluctuating below the main descending resistance for the overall bearish wave that started from 1.1277 high, and below the cluster of moving averages and 1.0815 horizontal resistance, and that favors the bearish resumption scenario, as the price has formed a long-legged candle at that resistance, hinting renewed bearish pressures.
The AUD/USD moved decisively higher on Friday, rebounding of the 50-days SMA and the neckline for a potential head and shoulders pattern. Where, holding above the neckline of the pattern keeps the bullish scenario favored in the near term, targeting the recent highs near 0.9500, a break above 0.9425 would confirm the bullish rebound. Note that a break back below the neckline of the head and shoulders would signal a short term bearish reversal.
The NZD/USD rebounds higher, as the price starts the week with a bullish gap, however price remains below key resistance levels starting at 0.8715 and that keeps the bearish bias favored in the near term. We maintain our bearish expectations, targeting mainly 0.8580 level, where a break below the 50-days SMA would confirm and support the bearish scenario.
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