Daily analysis of USD/JPY for January 21, 2016 Market Analysis Review

Overview

We remain cautious on strong support at 116.13 moving downside. Price actions at 125.85 are viewed as a sideways consolidation pattern. Above 118.10, minor resistance will indicate near term reversal and turn bias back to the upside support ( 120.33) turned resistance first. Nonetheless, a sustained breakout of 116.13 will indicate that there is a deeper medium-term correction. At this point, we consider this pattern to be sideways and expect strong support around 116.13 to keep moving downside. However, a sustained breakout of 116.13 will indicate that the corrective fall from 125.85 would extend to 38.2% retracement of 75.56 (2011 low) to 125.85 at 106.63 and below.

Daily Pivots: (S1) 116.05; (P) 116.86; (R1) 117.75;

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