USDJPY traded sharply lower before stabilising on Thursday. This signals a possible reversal of the recent correction between Aug 2 - 8. A bearish theme remains in place following the Jul 28 bull channel breakout. The channel is drawn from the Mar 4 low and the break signalled a reversal. A continuation lower would expose 130.41, the Aug 2 low and the bear trigger. Firm resistance has been defined at 135.58, the Aug 8 high.
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USDJPY remains bullish. The pair traded higher Monday and breached resistance at 137.00, the Jun 29 high. The break confirms a resumption of the primary uptrend and signals scope for an extension. The fresh cycle high also highlights the fact that corrections remain shallow, reinforcing underlying bullish conditions. The focus is on the 138.00 handle and 138.56 further out, a Fibonacci projection. Firm short-term support lies at 134.27, the Jun 23 low.
Investment-grade corporate credit risk currently running mildly lower with stocks trading marginally mixed: SPX eminis currently trading -37.5 (-0.96%) at 3863.5; DJIA -103.05 (-0.33%) at 31234.1; Nasdaq -222.8 (-1.9%) at 11410.74.