USD/JPY: Mid-range but with growing upside potential – Westpac

Despite more positive long term momentum, daily indicators appear toppish as USD/JPY re-enters 2017’s central range (112-115), according to Tim Riddell, Research Analyst at Westpac.

Key Quotes

“Dips ought to hold the 111.85-112.15 area to avoid an interim unwind of recent gains. If the area holds, an early push to retest 114.30-50 should develop.”

“Weekly

• Potential for a full retest of mid-’17’s 114.30-50 highs is supported by the upwards swing in momentum. At present price action remains broadly corrective
• In order to avoid a protracted consolidation, USD/JPY would need a dynamic move above 114.50. If it were to occur, it could signal an early push to 118.65.”

“Monthly

• Although monthly momentum remains at decidedly neutral levels, the subtle turn higher into 4Q raises the potential for further USD gains
• Despite risk of a prolonged consolidation, the notably positive outside range for the month suggests that the there could be an early return to the underlying uptrend”