USD/JPY: Corrections mature, uptrend to resume - Westpac

In view of the Tim Riddell, Research Analyst at Westpac, current USD gains are dynamic, supported by an upturn in daily momentum which are likely to result in USD/JPY entering 115.15-95 retracement area and could even retest 118.65 high.

Key Quotes

“Dips ought to hold above 113.00-10 to sustain the upside potential and so avoid a secondary phase of corrections (of the rally from 100 area).”

“Weekly

• Weekly momentum is more neutral but could turn to positive if current gains are sustained. That could push aside risk of a secondary corrective pullback
• Price action off 118.65 appears wholly corrective. Even if a secondary pullback were to develop, it should affirm a solid base for a dynamic push above 118.65”

“Monthly

• After an interim pause, the uptrend from 2016’s lows could see a full retest of the 125-126 highs (could even extend towards 135-140 area)
• Monthly momentum remains positive and, with momentum across time frames more in line, the strong uptrend could reassert itself.”