USD/JPY the correction is complete, next support 143.40
The Bank of Japan is giving the clearest signs of a possible change in monetary policy. Wage settlement is the focus with the manufacturing sector reportedly agreeing to the highest pay rises for over 25 years. This is likely to force other companies to follow suit. This could be the catalyst for raising interest rates at the Bank of Japan monetary policy meeting on March 19.
JPY Basket - although we are seeing a period of consolidation going into next week's important meeting, the basket is assessed as being within a positive cycle (bullish)
DXY (USD Index) - we witnessed a boost in the index yesterday after the US data. From a technical standpoint, we are trading within the BC leg of a Gartley formation. We have trendline resistance located at 103.22. Bespoke resistance is located at 103.18. I look for limited gains (bearish)
Correlation studies would suggest selling USD/JPY
USD/JPY - trading within a corrective channel formation. Bespoke resistance is located at 148.66. We have seen a rejection of this important barrier overnight.
The daily chart highlights the next zone of support at 143.38 and 143.16.
Conclusion: the current move to the upside is analysed as corrective. Selling at 148.60 (inside bespoke resistance), with a stop loss at 149.30 (a break of structure), and a target level of 143.40 (bespoke), offers a risk-reward factor of 7.4R.
Resistance: 148.66 (bespoke), 149.10 (channel top), 149.21 (swing low)
Support: 146.48 (swing low), 143.38 (bespoke), 143.16 (bespoke)
JPY Basket - although we are seeing a period of consolidation going into next week's important meeting, the basket is assessed as being within a positive cycle (bullish)
DXY (USD Index) - we witnessed a boost in the index yesterday after the US data. From a technical standpoint, we are trading within the BC leg of a Gartley formation. We have trendline resistance located at 103.22. Bespoke resistance is located at 103.18. I look for limited gains (bearish)
Correlation studies would suggest selling USD/JPY
USD/JPY - trading within a corrective channel formation. Bespoke resistance is located at 148.66. We have seen a rejection of this important barrier overnight.
The daily chart highlights the next zone of support at 143.38 and 143.16.
Conclusion: the current move to the upside is analysed as corrective. Selling at 148.60 (inside bespoke resistance), with a stop loss at 149.30 (a break of structure), and a target level of 143.40 (bespoke), offers a risk-reward factor of 7.4R.
Resistance: 148.66 (bespoke), 149.10 (channel top), 149.21 (swing low)
Support: 146.48 (swing low), 143.38 (bespoke), 143.16 (bespoke)