19 May 2015
USD/JPY: Upside resolution preferred view - JPMorgan
FXStreet (Bali) - The Short term range within the broad consolidation phase in USD/JPY continues, notes JPMorgan's Global FX Strategy Team, adding that support in the 118.50/00 zone is now key.
Key Quotes
"The broad consolidation phase below the December/March highs continues to develop as key levels remain well-defined."
"Given the lack of a resolution to this consolidation phase, the risk of a repeat to the first half of 2014 continues to rise. Again, this pattern saw USD/JPY maintain a well-defined range until a mid-year breakout."
"While an upside resolution to the range is still the preferred view, the overall range parameters remain well-defined."
"For the short term setup, the recent two-sided price action below the April peak highlights the importance of the 118.50/00 support zone. This area includes the range lows from late-March and should define whether a deeper pullback within the broad consolidation can develop."
"In this regard, violations would target critical support starting with the 116.65/115.49 zone which includes the February and December lows, as well as the 38.2% retracement from the October 2014 low."
"Alternately, strength above the 120.85 April high should allow for a closer test, if not break of the 122.02 March peak. Note this level should define whether a closer test of the 124 zone (2007 high) can be seen.
Key Quotes
"The broad consolidation phase below the December/March highs continues to develop as key levels remain well-defined."
"Given the lack of a resolution to this consolidation phase, the risk of a repeat to the first half of 2014 continues to rise. Again, this pattern saw USD/JPY maintain a well-defined range until a mid-year breakout."
"While an upside resolution to the range is still the preferred view, the overall range parameters remain well-defined."
"For the short term setup, the recent two-sided price action below the April peak highlights the importance of the 118.50/00 support zone. This area includes the range lows from late-March and should define whether a deeper pullback within the broad consolidation can develop."
"In this regard, violations would target critical support starting with the 116.65/115.49 zone which includes the February and December lows, as well as the 38.2% retracement from the October 2014 low."
"Alternately, strength above the 120.85 April high should allow for a closer test, if not break of the 122.02 March peak. Note this level should define whether a closer test of the 124 zone (2007 high) can be seen.