USD/JPY: Retracement developing before uptrend resumes - Westpac

Tim Riddell, Resarch Analyst at Westpac, is assessing the price structures in the AUD/USD for 1Q 2017.

• DAILY
  • After failing at the 115.50-80 resistance area, the sharp slide through previous 111.50-75 support has triggered deep pullbacks towards 108.75-109.40 area
  • However, such moves are still consistent with corrections off Dec’s 118.65 high. Daily momentum is low. A turn/divergence is needed to confirm a near term base
• WEEKLY
  • Weekly momentum has slipped through neutral levels and remains negative. USD pullbacks could therefore continue, but are again considered to be corrective
  • The 108.75-109.40 area should provide a solid base for another strong uptrend through 118. A close above 112.50 could trigger a turn in momentum.
• MONTHLY
  • After current corrections, the uptrend from 2016’s lows could see a full retest of the 125-126 highs (and could even extend towards 135-140 area)
  • Monthly momentum remains positive. Although momentum across time frames is not aligned, a strong uptrend is expected to resume