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OUTLOOK: Price Signal Summary - USDJPY Correction Extends

OUTLOOK
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  • In FX, a downtrend in EURUSD remains intact, however, the pair continues to trade above last week’s low. The Nov 22 price pattern - a hammer candle - highlights a possible short-term base and if correct, the start of a corrective cycle. The trend is oversold and a recovery would allow this condition to unwind. Firm resistance to watch is 1.0624, the 20-day EMA. For bears, a move through 1.0335, the Nov 22 low would resume the downtrend.
  • A downtrend in GBPUSD remains intact and the pair continues to trade closer to its recent lows. Moving average studies are in a bear-mode set-up, highlighting a dominant bear trend. Sights are on 1.2446, the May 9 low. Initial firm resistance to watch is at 1.2739 the 20-day EMA. A short-term bounce would be considered corrective and allow an oversold condition to unwind.
  • The medium-term USDJPY trend condition remains bullish, however, this week’s move lower strengthens the current corrective cycle. The pair has traded through the 20-day EMA, exposing key support at 151.56, the 50-day EMA. This average has been pierced, a clear break of it would signal scope for a deeper retracement towards 150.19, the 38.2% retracement of the Sep 16 - Nov 15. A reversal higher would refocus attention on the bull trigger at 156.75, the Nov 15 high.
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  • In FX, a downtrend in EURUSD remains intact, however, the pair continues to trade above last week’s low. The Nov 22 price pattern - a hammer candle - highlights a possible short-term base and if correct, the start of a corrective cycle. The trend is oversold and a recovery would allow this condition to unwind. Firm resistance to watch is 1.0624, the 20-day EMA. For bears, a move through 1.0335, the Nov 22 low would resume the downtrend.
  • A downtrend in GBPUSD remains intact and the pair continues to trade closer to its recent lows. Moving average studies are in a bear-mode set-up, highlighting a dominant bear trend. Sights are on 1.2446, the May 9 low. Initial firm resistance to watch is at 1.2739 the 20-day EMA. A short-term bounce would be considered corrective and allow an oversold condition to unwind.
  • The medium-term USDJPY trend condition remains bullish, however, this week’s move lower strengthens the current corrective cycle. The pair has traded through the 20-day EMA, exposing key support at 151.56, the 50-day EMA. This average has been pierced, a clear break of it would signal scope for a deeper retracement towards 150.19, the 38.2% retracement of the Sep 16 - Nov 15. A reversal higher would refocus attention on the bull trigger at 156.75, the Nov 15 high.