BIAS: There is lack of clarity and best follow USDJPY and EURUSD
Resistance: | 130.30 | 130.51 | 130.88-16 | 131.36 |
Support: | 129.80 | 129.58 | 128.70-90 | 128.00 |
MAIN ANALYSIS: The 130.10-36 area did not cap and the move higher was too deep to fit within the bearish structure. Thus, it seems as if the 129.58 low was the final low in the first section of the decline. The problem we now face is how deep the correction be? So far it is around 30% and that could be enough. However, I do see upward risk in EURUSD and potentially in USDJPY also. Thus, I feel we need be open for gains to 130.88-131.16. There is also 131.36 but I have more doubts that it could be that strong. Thus, while unclear, we should be looking for bearish reversal indications...
COUNTER ANALYSIS: An earlier dip below 129.58 would appear to point to direct losses - the immediate target being the 128.00 corrective low. This should hold on first test but overall the bearish outcome looks more bearish then and I'm not convinced that USDJPY is pointing to these losses at the current time. Below 128.00 there are only minor supports at 127.50-60 and 126.95-05 ahead of the 126.57 low.
MEDIUM TERM ANALYSIS:
31st July: We have seen some progress and while a mildly deeper correction is still possible I do feel that we have established the first leg and now it's a matter of confirming the correction. Once this is done we should be able to home in on a few potential bearish projections. At this stage we do not have enough information.
Only back above 132.73 would risk a move back to the 133.81 high.
Good trading
Ian Copsey