USD/JPY: technical picture
USD/JPY opened with a 10-pip bearish gap and formed a bearish engulfing in the first hours of today’s trade (see H1). The pair renewed minimums since the end of June at 97.63. Note though that twice US dollar found support in this area. Here we find 50% retracement of the advance from June to July and the bottom of the daily Ichimoku Cloud. The pair has reached targets of the head and shoulders pattern and is close to the lower edge of the descending channel in the 97.20/25 area. There may be some more sideways trading in the current area.
Still, the overall picture looks pretty negative. The pair slid below 98.20/40 (July 11 low, 100-day MA), and technical indicators don’t point at correction, so be ready to sell on the break below the mentioned support levels expecting a decline towards 96.75, 95.60 and 93.75. Resistance lies at 98.40, 98.60, 99.70, 100.00 and 100.35 (upper border of the channel).
But as we’ll have a lot of news from America this week (http://www.fxbazooka.com/en/news/show/299), one has to remain cautious.
Chart. Daily USD/JPY