USDJPY: Bearish Despite Recovery Attempts!
As long as 112.35 resistance holds on a daily closing basis, the USDJPY remains on the downside to the 111.75 levels, a halt is likely, and a return to 112.35 before going down is suggested, but a cut through support 111.75 would open 111.05 level, further down, support comes at the 110.50 levels.
Above 112.35 – daily closing basis – sees recovery threats to 112.85/112.38 levels, a failure to hold above 112.35 could mean a return to 111.75 levels.
On the upside, a sustained breakout- daily closing – above 112.35 will bring limited gains below 112.85/113.38 levels before another fall, above 113.38 will reverse risk to the upside to the 114.54/114.88 levels.
Conclusion: The USDJPY continues to face downside threats below 113.38 levels even in the case of a corrective recovery…
Support:111.75, 111.05, 110.50, 110.05
Resistance: 112.35, 112.85, 113.38, 114.27
- The Federal Reserve will release minutes of its most recent policy meeting today at 18:00 GMT. Any Hawkish tone by the Fed ( hiking rates at year end, good news about inflation) will support the USD, the USDJPY is likely to fly beyond 112.35 level. But Any Dovish tone ( delaying hiking rates, conflict with Trump, bad news about inflation) will support the JPY against the USD if seen a return to 111.75 is suggested.
Keep in mind the pair may spike to 112.55/112.85 levels before falling once again below 112.35 levels.