16 Jun 2015
USD/JPY: short-term correction likely – JPM
FXStreet (Barcelona) - FX Strategist at J.P.Morgan see the possibility of a short-term corrective phase for USD/JPY but expect the support at 122.20/121.70 to hold.
Key Quotes
“The bullish resolution to the December-May consolidation phase affirmed the medium term upside bias. Still, the current setup can allow a short term corrective phase before the uptrend resumes.”
“The push through the critical 121.85/122.05 resistance which included the former range highs from December- May and the late-May breakout area remains consistent with the overall bullish framework. In turn, the focus is now on the 128/130 zone. This area includes the key 61.8% retracement of the decline from the 1990 high. Above here would target the 135 area and high from 2001.”
“For the short term setup, note that the 122.20/121.70 area and recent breakout zone will now act as key support while maintaining the potential for a quick return to the underlying uptrend. Breaks would imply a deeper short term retracement is due with risk into the 120.60/00 zone. This area represents the midmay breakout area and 76.4% retracement from the late- April low. Still, a violation of the 118.50/15 support zone and range lows from March would confirm the onset of a deeper corrective phase.”
“From a momentum standpoint, the short and medium term overbought framework is a concern, but the price action maintains a trending bias.”
Key Quotes
“The bullish resolution to the December-May consolidation phase affirmed the medium term upside bias. Still, the current setup can allow a short term corrective phase before the uptrend resumes.”
“The push through the critical 121.85/122.05 resistance which included the former range highs from December- May and the late-May breakout area remains consistent with the overall bullish framework. In turn, the focus is now on the 128/130 zone. This area includes the key 61.8% retracement of the decline from the 1990 high. Above here would target the 135 area and high from 2001.”
“For the short term setup, note that the 122.20/121.70 area and recent breakout zone will now act as key support while maintaining the potential for a quick return to the underlying uptrend. Breaks would imply a deeper short term retracement is due with risk into the 120.60/00 zone. This area represents the midmay breakout area and 76.4% retracement from the late- April low. Still, a violation of the 118.50/15 support zone and range lows from March would confirm the onset of a deeper corrective phase.”
“From a momentum standpoint, the short and medium term overbought framework is a concern, but the price action maintains a trending bias.”