USD/JPY: Risk of on an interim, corrective pullback towards 112.00 should not be ignored - Westpac

According to Tim Riddell, Research Analyst at Westpac, risk of on an interim, corrective pullback (towards 112.00) should not be ignored for USD/JPY pair, but if it occurs, this would be a pause within the uptrend.

Key Quotes

“Daily momentum is at risk of rolling lower after the failure to breach 114.65. If dips are contained, 116.20 could attract before a broader consolidation forms”

“Weekly

• Weekly momentum has turned firmly USD supportive and underscores the potential for a move through 115.00 to retest December’s 118.65
• Pullbacks will determine how swiftly USD advances to retest 118.65. A period of consolidation should form a platform for more gains through 118.65 in 2H’17”

“Monthly

• Monthly momentum has become more supportive after the recent consolidation and suggests a resumption of the uptrend that began in mid-2016’s
• Although risk of a more prolonged consolidation remains, the broader uptrend should trigger a full retest of 125-126 (could even extend towards 135-140 area)”