The currency pair is in a long-term uptrend from the 1.1640 bottom (15 November 2005). Technical indicators are still downtrending on daily basis from the 1.5901 peak and trading is situated between 50- and 200-day SMA, currently projected at 1.5584 and 1.5046.
Within the last month trading maintained its ranging mode and we witnessed sharp swings between 1.5283 and 1.5844. Our favored reversal point at 1.5211 was not reached, as the pair succeeded to dip only to 1.5301, a fact , that brings out some questions about the importance of 1.5844 resistance and whether this level can be really accepted as a confirmative one to a potential renewing of the general uptrend. Nevertheless, we think, that a mid-term bottom was set at 1.5301, thus finalizing the consolidation since 1.5901 and currently an upmove is on the run, targeting 1.6566.
With a respect to the higher time-frames, our mid-term outlook remains clearly "bullish", for new highs beyond 1.6019. Crucial continues to be 1.4439 and only after breaking above 1.6019 it will be replaced by 1.5301.
We feel that a rise for a break beyond 1.6019 has already began from recent bottom at 1.5301. During first half of the month, the pair is more likely to stay in the consolidation range below 1.5909 (03 July 2008), before renewing the uptrend for 1.6135, en route to 1.6566. An eventual slide below 1.5461 would disprove our bullish view, as it will signal, that the wide consolidation since 1.5901 is not over yet and one more test of the 1.5301-1.5883 support is underway. Such possible development, is of course not relevant to our long-term attitude for new highs beyond 1.6019, that we consider to be inevitable.
A clear downtrend is on the run from the mid-term top at 124.14 and it broke below the important dynamic support projected at 107.21-60, reaching low at 95.75. Technical indicators are neutral on daily basis and trading is situated between the 34- and 144-period SMA, currently projected at 105.39 and 109.01.
The currency pair partially came up to our expectations, as it reached peak at 108.59, where we witnessed a reversal of the upmove, followed by a drop to 104.99. Unfortunately this is extremely inadequate to be clearly confirmed, that at 108.59 was set the final of the corrective rise since 95.75 mid-term bottom, respectively that the pair is in the beginning of a strong downtrend towards 90's zone. We hold on to our view, that the overall downtrend from 124.14 is not finalized at 95.75 and the rebound from that level is by all means a corrective one, preceding new lows in USD/JPY.
DJIA has responded precisely to our expectations, as the sell-off, that began in the beginning of June, was accelerated and reached low just few points below our target at 11'192. We feel, that current fall has great potential for new, lower values and we expect smooth slide to 10 652 and probably to the 10'000 sentiment level in the weeks to come.
During current month we expect the fall from 108.44 to be renewed, targeting 102.63, as a break below that level will confirm our bearish outlook for a strong downtrend, targeting 95.75. Crucial for our view is 108.44, as breaking above it will show, that the pair is still in the corrective pattern since 95.75, that we consider less likely at the moment. On the higher time-frames 109.52 and mostly 111.62 are the resistance points that would "cool" our confidence for new lows below 95.75.
The currency pair is still in the corrective phase in relation with the downtrend from the 2.1160 long-term top. Technical indicators are rising on daily basis and trading is situated below the 50- and 200-day SMA, currently projected at 1.9689 and 1.9975.
As expected the pair stayed in the broad consolidation above 1.9374 and there is no change in our long-term view, that current range is corrective to the slide from 2.1163 and is preceding strong downtrend towards 1.8000. Having in mind the high time-frame from which 2.1163 top is derived, we think its prolonged development is pretty normal and only after a break below 1.9336 will confirm, that the awaited downtrend towards 1.80 has already began.
During July we expect the pair to continue its uptrend towards 2.0274 and probably 2.0437, where a reversal should be expected, that shall set the beginning of a strong downtrend to 1.9338 and 1.9192. The 2.0397 top has no technical importance in the daily (and above) time-frames, so it will not play any role about the expected reversal, until 1.9338 gives way.
Risk Disclaimer: These analyses are for information purposes only. They do not post a buy or sell recommendation for any of the financial instruments herein analyzed. The information is obtained from generally accessible data sources. The forecasts made are based on technical analysis. However, Deltastock's Analyst Department also takes into consideration a number of fundamental and macroeconomic factors, which we believe may impact the price moves of the observed instruments. Deltastock Inc. assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon the information on this page. Deltastock Inc. shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation, losses or unrealized gains that may result. Any information is subject to change without prior notice.
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