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USD weakness expected versus the JPY and EUR

Yesterday’s stock market fall saw the Forex pairs break through key resistance and support levels, notes Wilson Leung, Director of Trendsetter FX, as he shares the forecast for USD/JPY and EUR/USD


USD/JPY: Sell the recovery

Leung describes yesterday’s price action on USD/JPY, with the pair having seen a 500 point decline. Looking at the technical charts, he sees the price action suggesting the formation of a double top pattern on the cross, with the measured downside target pointing at 114.98. He further believes that the China situation suggests a quick turnaround in the stock markets is unlikely to be seen, and hence he remains a seller on USD/JPY on any intraday recovery above 120.42, targeting 117.90 levels with a stop loss at 121.

He further explains that 121 remains a key level for the cross.

EUR/USD: Buy dips

Leung maintains a buy on dips approach on EUR/USD below the 115.00 level. He sees some upside potential for the cross ahead.

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