- WEEKLY CHART: This chart previously found strong resistance from the 61.8% recovery level. Latest weakness, reinforced by the support line break, at least postpones any attempt higher –we currently don’t know whether this is a temporary pullback phase or if the 87.11 lows are at serious risk.
- DAILY CHART: We must respect the bears after last week’s break below key 94.00/93.82 support. But we are reluctant to give a name to the apparent top formation as its importance is uncertain. In Tue’s FX Trading Guide we noted s/term support could be seen from the bear channel base projection so this week’s rebound is no surprise. It enabled us to establish theoretical shorts in a suggested 93.80/94.00 area, initial stops at 95.25 and targeting 92.00 for partial profits. First resistance is now offered by the 94.86 23-Jun low and ideally this will hold. A stronger recovery through 96.99 01-Jul high would negate the bear view. Meanwhile, channel base support notwithstanding, the bears have a sporting chance of seeing a move lower to the 90.50 76.4% area. There are also two Fibo projections quite near to this, although we reserve judgment as to how effective these are in USD/JPY.
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