After such a strong upward move since February 2nd, a correction is very natural. This was also expected because of the approaching psychological resistance of 85.00. The facts that USD/JPY has broken below the support of 22-day EMA and also the support of Kijun-sen of daily Ichimoku cloud first time since February 10th, turns the focus for some more downward correction. With a decisive break below 81.90 we would expect further downward move towards the range of 81.05/81.30. Please note that the upcoming supports are as follows:
1) Near 81.30: Upper edge of daily Ichimoku cloud.
2) Near 81.05: Fibonacci 38.2% retracement of the upward move during February 2nd to March 15th.
3) Near 80.90: 55-day EMA.
4) Support because of approaching psychological level of 80:00.
Please note that we are taking the recent downward move and also the expected further downward move as a consolidation/correction and not as a bearish trend. We would still favor another upward move after this correction. Even if the pair breaks the above mentioned supports, we would expect a very strong support near 81.58 (March 7th and 8th).
In case USD/JPY fails to break below 81.90 and if a break over 83.00/83.20 resistance zone takes place then our focus will again change towards a retest of 84.18 and then 84.60 before a move towards the psychological level of 85.00 takes place.
Further Readings:
1) USD/JPY Forecast: for weekly outlook of Dollar-Yen pair.
2) Daily technical analysis of USD/JPY.
3) GBP/JPY outlook.
By forexabode.com
