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11 Mar 2014
Flash: USD/JPY needs break above 103.75 to reafirm bullish profile - ANZ
FXStreet (Bali) - According to Tim Riddell, Head of Market Research at ANZ, USD/JPY needs a close above 103.75 if the pair is to adopt a more defined bullish profile again.
Key Quotes
"Last week’s dip to 101.20 highlights concerns that a broader consolidation may still in be place off 105.50, which could still force a breach of 101.00 (50% of gains since early Oct.) for a test of the 99.00 area."
"Rebounds off 101.20 appear constructive, but the neutral profile of weekly momentum indicators and the above concerns will only be reduced by a weekly close above 103.65."
"It should be noted that, even if a broader consolidation were to form, the underlying trend is still to the upside. Pullbacks would be seen as postponing, not averting, an eventual test of the 111.50-112.00 area."
"Patterns are finely balanced at present. There will be calls for the rebounds off 100.75 to labelled as a “bear flag” correction of the fall from 105.50. That would imply another near 5 JPY down-leg from 103.75."
"However, a close above 103.75 would negate the risk of such a slide and could signal an early return to the underlying uptrend and for a move to test of the critical 105.60-106.15 area (within moves to 112.00)."
"Consequently, the style and depth of pullbacks from 103.75 need to be closely monitored. In brief: a close above 103.75 would be USD positive, whereas a breach of 102.20 would favour the bear-flag scenario."
Key Quotes
"Last week’s dip to 101.20 highlights concerns that a broader consolidation may still in be place off 105.50, which could still force a breach of 101.00 (50% of gains since early Oct.) for a test of the 99.00 area."
"Rebounds off 101.20 appear constructive, but the neutral profile of weekly momentum indicators and the above concerns will only be reduced by a weekly close above 103.65."
"It should be noted that, even if a broader consolidation were to form, the underlying trend is still to the upside. Pullbacks would be seen as postponing, not averting, an eventual test of the 111.50-112.00 area."
"Patterns are finely balanced at present. There will be calls for the rebounds off 100.75 to labelled as a “bear flag” correction of the fall from 105.50. That would imply another near 5 JPY down-leg from 103.75."
"However, a close above 103.75 would negate the risk of such a slide and could signal an early return to the underlying uptrend and for a move to test of the critical 105.60-106.15 area (within moves to 112.00)."
"Consequently, the style and depth of pullbacks from 103.75 need to be closely monitored. In brief: a close above 103.75 would be USD positive, whereas a breach of 102.20 would favour the bear-flag scenario."