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Forex pairs in this Article » USD/JPY (New York) - Despite appearing to be frustratingly range bound, recent price action actually underscores the previously stated bias to build JPY shorts into USD dips, suggests Tim Riddell, Head of Global Markets Research at ANZ.

Key quotes

“An uncomfortable slide to 95.80 belies the potential that the 96.75-97.25 area is actually forming a solid base for secondary rebound through 98.70 (interim 50%) to at least 101.50 if not a measured move for a retest of the 103.85 high.”

However, “this could still be part of a broad consolidation of the strong gains seen since Q2 2012 rather than a resumption of the rally. Broader caution is still noted. The bias after such a strong rally (as in the rally from 77-103) is for a swift return to that uptrend. However, the more likely scenario is that a broader consolidation pattern develops before this underlying uptrend can resume.”

In that context, “the current price action is likely to be forming a minor base within a larger consolidation pattern. This should then allow for a redefining of the recent (103.75) high. Longer term, pullbacks should still be seen as a buying opportunity.”
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