USD/JPY: downside risks
So, USD/JPY failed to close above 100.00 yesterday thus confirming out pessimistic short-term outlook. On the upside the pair is capped by the 100.80 area (last week’s high) where one may find the resistance line descending from May highs.
The greenback slid below the support line drawn from July lows. Technical indicators allow scope for further decline. In our view, as long as USD/JPY trades below resistance mentioned above, the possibility that it revisits 98.20/00 is high. The next important support lies at 97.70/50 (bottom of the daily Ichimoku Cloud, 23.6% Fibo of the advance since autumn 2012). The slide below this zone would expose 95.50 and June low below 94.00.
For this outlook to change the bulls have to push the prices above yesterday’s high of 100.60.
Chart. Daily USD/JPY