USD/JPY scope for correction lower/consolidation – Commerzbank

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair could attempt a correction lower or a consolidative pattern in the near term.

Key Quotes

“USD/JPY continues to consolidate at the 100 week ma at 114.74, this together with a divergence of the daily RSI and a 13 count does point to a near term correction lower/consolidation. Dips lower are expected to hold the 111.60/109.60 zone for a reattempt on the topside. Above here we also have the 115.41 top of the weekly cloud (this is also the location of the 61.8% retracement of the move 2015-2016) and we are allowing for a near term consolidation. Intraday Elliott wave counts are not as negative and we have raise our take profit”.

“Above 115.41 would target 120.00/120.10, the 78.6% retracement of the move down from 2015”.