By Mexgroup.com

USD/JPY Further Drop Expected

USD/JPY increased today, but technically is still expected to drop further in the upcoming period because is located in the seller’s territory. Price increased as the Nikkie posted little gains today, the index is moving sideways after the failure to close below the 19309 low. The JP225 remain under selling pressure, the minor consolidation could be a distribution movement, signaling further drops.

Technically, the Nikkei is expected to drop towards the 18936 static support, a further drop will force the Yen to dominate the currency market. USD/JPY stays near the 109.46 today’s high even if the United States data have come in mixed, the Unemployment Claims increased from 232K to 234K in the previous week, but has come in better versus the 237K estimate. Unfortunately, the Existing Home Sales have decreased unexpectedly, from 5.52M to 5.44M in July, much below the 5.55M estimate.

Price has come back to retest the first warning line (wl1) of the ascending pitchfork and the 50% retracement level and now is expected to decrease and to resume the bearish movement. USD/JPY increased even if the dollar index has posted little gains, but unfortunately is somehow expected to decrease in the upcoming days till will reach and retest a significant support.

The next downside target will be at the 61.8% retracement level while the near term major downside target will be at the 38.2% retracement level.

Brent Oil Imminent Breakdown

Brent Oil is under massive selling pressure after the failure to reach and retest the 53.03 static resistance. A breakdown below the downside line of the ascending channel is favored, but we still have to wait for a confirmation.

It is almost to drop $1 in one single session, signaling an exhaustion and a potential leg lower in the upcoming period. The next major downside target will be at the 50% retracement level.

NZD/USD Breakdown Needs Confirmation

NZD/USD extended the sell-off and could stabilize in the seller’s territory. Has managed to breakdown below a strong confluence area, but now could come back to retest the broken levels before will resume the corrective phase. Price has dropped below the Neckline of the Head and Shoulders pattern, a retest will confirm a drop of at least 300 pips.

By Olimpiu Tuns

Market Analyst

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The post Daily Market Report – USD/JPY Downside Prevails August 24, 2017 appeared first on mexgroupblog.