As we approach month end, USD/JPY is trading near the same levels of two months ago; such a range-bound environment is likely to persist into August. Overall, the rapid move higher from late 2012 into Q2-2013 has now transitioned into sideways consolidation as the market acclimatises at these higher levels. This is ultimately a bullish development for later this year. For the time being, weakness in the Nikkei is giving reason for JPY crosses to correct lower in range. EUR/JPY is likely to test its daily cloud base though a close below this cloud is needed to signal a change in the uptrend that began nearly a year ago.
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